Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
®, the DeskTop In-and-Out Board makes your office run smoother.

 

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jeffrey West and Bonnie West v. The Alaska Mental Health Trust Authority; State of Alaska, Department of Natural Resources, Trust Land Office; Louis Oliva; and Stacy Oliva (7/24/2020) sp-7468

Jeffrey West and Bonnie West v. The Alaska Mental Health Trust Authority; State of Alaska, Department of Natural Resources, Trust Land Office; Louis Oliva; and Stacy Oliva (7/24/2020) sp-7468

          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  



JEFFREY  WEST  and  BONNIE  WEST, )  

                                                             )     Supreme Court No. S-17407  

                                                                                                  

                              Appellants,                    )  

                                                             )     Superior Court No. 3KN-18-00087 CI  

                                                                                                                          

          v.                                                 )  

                                                             )                        

                                                                  O P I N I O N  

                                  

ALASKA MENTAL HEALTH                                         )  

                                                                                                  

                                                   

TRUST AUTHORITY; STATE OF                                    )    No. 7468 - July 24, 2020  

                                             

ALASKA, DEPARTMENT OF                                        )  

                                            

NATURAL RESOURCES, TRUST                                     )  

                                                      

LAND OFFICE; LOUIS OLIVA; and   )  

               

STACY OLIVA,                                                 )  

                                                             )
  

                              Appellees.                     )
  

                                                             )
  



                                                                                                        

                    A            

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

                                                                                

                    Judicial District, Kenai, Lance Joanis, Judge.  



                                                                                                              

                    Appearances: Hilary D. Stump and Carl Bauman, Gilman &  

                                                                                                       

                    Pevehouse, Kenai, for Appellants.  Colleen J. Moore, Senior  

                                                                                                           

                    Assistant  Attorney  General,  Anchorage,  and  Kevin  G.  

                                                                                                     

                    Clarkson, Attorney General, Juneau, for Appellees Alaska  

                                                                                                   

                    Mental   Health   Trust   Authority   and   State   of   Alaska,  

                                                                                                       

                    Department of Natural Resources, Trust Land Office. Robert  

                                                                                                        

                    J. Molloy and Kristine A. Schmidt, Molloy Schmidt LLC,  

                                                                                         

                    Kenai, for Appellees Louis Oliva and Stacy Oliva.  



                                                                                                  

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

                                         

                    and Carney, Justices.  



                                         

                     STOWERS, Justice.  


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

I.         INTRODUCTION  



                      In October 2017 the Trust Land Office (Land Office) issued a best interest  

                                                                                                                                    



decision in favor of selling five lots of land owned by the Alaska Mental Health Trust  

                                                      



(Trust) to Louis and Stacy Oliva. Oliva's neighbors, Jeffrey and Bonnie West, submitted  

                                                                                                                                



late comments opposing the sale. The Land Office accepted those comments as a request  

                                                                                                                                    



for reconsideration, but it ultimately denied West's request and proceeded with the sale.  

                                                                                                                                                  



West appealed to the superior court, which affirmed the best interest decision. On appeal  

                                                                                                                                      



West argues that the sale was not in the Trust's best interest, the Land Office violated a  

                                                                                                                                               



number of statutes and regulations, and the agency's public notice regulation is invalid.  

                                                                                                                                                  



We conclude that West's first argument lacks merit and the remaining issues have been  

                                                                                                                                         



waived for various reasons; we therefore affirm the best interest decision.  

                                                                                                            



II.        FACTS AND PROCEEDINGS  

                                     



           A.         The Land Office And Background Facts  

                                                                                     



                      The Alaska Mental Health Trust Authority (Trust Authority) was created  

                                                                                                                                    



in 1991 to act as trustee for the lands granted to Alaska by the federal government in  

                                                                                                                                             

                                                                                             1   The Department of Natural  

1956 through the Alaska Mental Health Enabling Act. 

                                                                                                                                    



Resources (DNR) was tasked with the actual management of Trust lands, and it created  

                                                                                                                                    

the Land Office as a special unit to handle that duty.2   Prior to any decision involving the  

                                                                                                                                            



sale of Trust lands, the Land Office is required by regulation to consult with the Trust  

             



           1          See   AS   37.14.001;   AS   47.30.011.    See   generally   ch.   66,   SLA   1991  



(establishing Trust Authority);                      Weiss v. State        (Weiss II      ), 939 P.2d 380, 382-85 (Alaska           

1997) (detailing events prior to Trust Authority's creation).                       



           2          See AS 44.37.050(a) ("To carry out its duties under AS 38.05.801, the  

                                                                                                                                           

Department of Natural Resources shall establish a separate unit with responsibility for  

                                                                                                                                            

management of the mental health trust land."); 11 Alaska Administrative Code (AAC)  

                                                                                                                                     

§ 99.010 (2018) (describing Land Office's duties and authority).  

                                                                                           



                                                                      -2-                                                              7468
  


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

                                                                                                  3  

Authority's Resource Management Committee.                                                           The Land Office's executive director                          

makes the final decision whether a sale is in the Trust's best interest.                                                                     4  



                            In aJanuary 2017 consultation with theResourceManagement Committee,  

                                                                                                                                                           



the Land Office proposed to "offer up to 100 Trust properties" for sale each year from  

                                                                                                                                                              



2018 to 2020, including three of the five lots at issue in this appeal.  Those five lots -  

                                                                                                                                                                             



referred to as Lots 17, 22, 35, 36, and 37 - are located on Daniels Lake near Nikiski and  

                                                                                                                                                                           



are adjacent to Oliva's property.  Only Lot 17 has a common boundary with West's  

                                                                                                                                                                    



property.  Notice of sale was posted on Lots 17 and 35 in late April 2017 and the Land  

                                                                                                                                                                        



Office  commissioned  an  appraisal  of  those  two  lots.                                                           The  appraiser's  report  noted  

                                                                                                                                                                      



encroachments  and overturned gas containers on Lot 17, but it assessed the properties  

                                                                                                                                                              



based on the hypothetical conditions that the lots were clean and vacant.  The report  

                                                                                                                                                                      



valued Lot 17 at $93,000 and Lot 35 at $80,000, and recommended the lots be sold as-is  

                                                                                                                                                                         



for the highest return.  

                                               



                            Oliva submitted his application in late May seeking a negotiated purchase  

                                                                                                                                                                



of  those  two  lots  as  well  as  Lots  22,  36,  and  37.                                                       In  response,  the  Land  Office  

                                                                                                                                                       



commissioned  another  appraisal  for  the  three  additional  lots,  which  were  valued  

                                                                                                                                                                   



collectively  at  $145,000.                               The  appraiser  did  not  note  any  encroachments  or  other  

                                                                                                                                                                       



potential issues for those lots. Based on Oliva's offer and the appraisal reports, the Land  

                                                                                                                                                                        



Office again consulted with the Resource Management Committee in early August  

                                                                                                                                                                   



regarding the potential negotiated sale of the five lots to a "neighboring land owner."  

                                                                                                                                                                                    



              3            See   11 AAC 99.030(c)-(d);                                 Committees, A                  LASKA   MENTAL   HEALTH  TR.  



AUTHORITY,    https://alaskamentalhealthtrust.org/about/governance/committees/    (last  

visited Apr. 8, 2020) (describing Resource Management Committee's role as "advising                                                                            

the [Land Office] on managing the Trust's non-cash assets including land and natural                                                                                

resources").  



              4            See  11 AAC 99.010(b), (d); 11 AAC 99.020(b).  

                                                                                                          



                                                                                      -3-                                                                               7468
  


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

                                                                                                                     

The Land Office stated it would seek "approximately 20-30% above the appraised  



                                                                                                                          

values" and estimated the total revenue at around $410,000.  The consultation report  



                                                                                                                             

noted several "structural encroachments" placed by Oliva on Lot 17, including a barn  



                                                                                                                            

and a manmade pond, and reasoned that "the sale would generate revenue for the Trust  



                                                                                                                

while solving an ongoing trespass/encroachment issue."  The Resource Management  



                                                                                           

Committee approved the negotiated sale without objection.  



                                                                                                                                

                    West met with the Land Office to discuss his interest in purchasing Lots 17  



                                                       

and 35 in August and submitted an application to buy those two lots.  West "provided  



                                                                                                                                

a firm verbal offer of up to 30% above" the lots' appraised values "contingent upon no  



                                                                                                                                     

competition," because he was "uninterested in getting into a bidding war" with Oliva.  



                                                                                                                             

The Land Office conducted a site visit in early September along  with a DNR land  



                                                                                                                        

surveyor.  The surveyor was able to find several field monuments with a metal detector  



                                                                                                                          

and noted that the property boundaries appearing on Alaska Mapper and the Kenai  



                                                                                                                             

Peninsula Borough's mapping service both contained erroneous boundary lines at odds  



                                                                                                                      

with the U.S. Bureau of Land Management's plat map. Based on the corrected boundary  



                                                                                                                   

lines, thesurveyor confirmed several structuralencroachments on Lot 17, butdetermined  



                                                                                                                   

that "there did not appear to be any structural trespass" on Lot 22.   The surveyor's  



                                                                                                                        

memorandum concluded by noting that "[t]he exact extent of structural or use trespass  



                                                                                                                                   

can only be determined by a complete survey performed by a professional surveyor."  



                                                                                                                            

                    West conducted his own site visit in September and then informed the Land  



                                                                                                                             

Office that he "can no longer support [his] original offer to purchase Lot 17 as is." West  



                                                                                                                                  

suggested subdividing both lots prior to sale and again offered "appraisal value plus a  



                                                                                                                               

30% premium" for only the unencumbered portions of Lots 17 and 35 "to help with the  



                                                                                                                                

cost of subdividing and to avoid a bidding war."  West later suggested that he would be  



                                                                                                                               

open to "the possibility of subdividing [the encumbered] portion off after acquiring the  



                                                                                                                            

entire lot" in order to avoid "be[ing] eliminated from consideration."  When the Land  



                                                               -4-                                                         7468
  


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

 Office asked if he was interested in purchasing any of the other parcels, West replied that                                                                                                                                                                                                                                                                                                                                                                                                                                     



his "interest remains exclusively in Lots 17 and 35."                                                                                                                                                                                                                                                                                   



                                                                                   In contrast, Olivastatedthat subdivisionwouldbeunacceptable, but agreed                                                                                                                                                                                                                                                                                                                                                      



to "pay reasonable compensation" for past use of Lot 17.                                                                                                                                                                                                                                                                                                                 In October, Oliva offered a                                                                                                                                            



 $10,000 settlement based on three years of unauthorized use at $3,000 per year, "plus an                                                                                                                                                                                                                                                                                                                                                                                                                                                 



 additional $1,000." This initial offer was rejected and Oliva subsequently agreed to pay                                                                                                                                                                                                                                                                                                                                                                                                                                         



 $21,000 separate from any land sale.                                                                                                                                                                                                Oliva also made an initial offer of 30% above the                                                                                                                                                                                                                                               



 appraisal price on Lot 17 and 20% above for the other four lots. After some negotiation,                                                                                                                                                                                                                                                                                                                                                                                     



 Oliva revised his offer to 30% above the appraised value for both Lots 17 and 35, and                                                                                                                                                                                                                                                                                                                                                                                         



25% above for the remaining three lots for a total purchase price of $406,150.                                                                                                                                                                                                                                                                                                                                                                                                                         



                                          B.                                       The Best Interest Decision And West's Request For Reconsideration                                                                                                                                                                                                                                                                                      



                                                                                   At the end of October 2017 the Land Office drafted its best interest decision                                                                                                                                                                                                                                                                                                                                     



to accept Oliva's proposal, finding it to be "in the best interest of the Trust."                                                                                                                                                                                                                                                                                                                                                                                                                                        The  



 decision noted that Oliva "ha[d] been using a portion of Trust land to house horses," but                                                                                                                                                                                                                                                                                                                                                                                                                                          



had "remitted $21,000 to pay in full the past unauthorized land uses."                                                                                                                                                                                                                                                                                                                                                                       West's offer was                                                                   



 also mentioned as an alternative option, but one that would not "resolve unauthorized                                                                                                                                                                                                                                                                                                                        



use" and would result in continued accrual of management costs for the three remaining                                                                                                                                                                                                                                                                                                                                                                                                   



lots "as a non-performing asset."                                                                                                                                                                             Proceeding with the sale to Oliva, on the other hand,                                                                                                                                                                                                                                                  



would   "alleviate   the   Trust   from   managing   a   non-performing   asset  and  resolve   an  



unauthorized   use,   while generating                                                                                                                                                                                              maximum revenue."                                                                                                                         The decision                                                                                 included   an  



inconsistency   determination   listing   a   number   of   statutes   that   were   not   applied   as  



 "inconsistent   with   Trust   management   principles   and   inapplicable   to   Trust   land   by  

                                                                                                                                                                                                                                                                                                                                                                                                                                                             5          Notice of the  

 [agency] regulations," including the notice provisions in AS 38.05.945.                                                                                                                                                                                                                                                                                                                                                                                                                                                             



                                          5                                        This statute governs certain state land sales and requires a robust public                                                                                                                                                                                                                                                                                                                                                   



notice process, such as by publishing notice for two weeks "in newspapers of statewide                                                                                                                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                       (continued...)  



                                                                                                                                                                                                                                                                     -5-                                                                                                                                                                                                                                                   7468
  


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

decision was to be provided in accordance with 11 AAC 99.050; anyone who submitted                                                                                                                                                                                                                                                                                                                            



comments could subsequently file for reconsideration.                                                                                                                                                                                                                                        



                                                                      Public notice began on November 2 with the best interest decision to be                                                                                                                                                                                                                                                                                                       



posted on the Land Office's website along with courtesy copies being sent to the state                                                                                                                                                                                                                                                                                                                  



website, the trustees, the municipality, and Oliva as the purchaser.                                                                                                                                                                                                                                                                                  The notice provided                                         



 a physical mailing address as well as an email address for submitting comments and                                                                                                                                                                                                                                                                                                                                                          



listed December 7 as the cutoff date.   The Land Office also called West to inform him   



directly where the decision would be posted and explained that "anyone has a right to                                                                                                                                                                                                                                                                                                                                                                 



 submit a written comment within that 30 days for consideration if they disagree."                                                                                                                                                                                                                                                                                                                                                       The  



Land Office formally adopted its decision on December 8, noting that "no comments                                                                                                                                                                                                                                                                                                                          



were received." That same day West requested a stay in order to submit late comments,                                                                                                                                                                                                                                                                                                                    



 alleging that he only recently found out about the comment period and that the Land                                                                                                                                                                                                                                                                                                                                                 



 Office had previously advised him that he had no "options for recourse or comment."                                                                                                                                                                                                                                                                                                                                                                                



West stated that his challenge would focus primarily on "[u]nfair business practices" and                                                                                                                                                                                                                                                                                                                                                      



whether the sale was in the Trust's best interest.                                                                                                                                                                                                          



                                                                      West submitted his written comments on December 11.                                                                                                                                                                                                                                                     West alleged a                                                              



number   of factual                                                                                   omissions from the best interest decision,                                                                                                                                                                                         including   that Oliva's   



"house and beach development" encroached on Lot 22.                                                                                                                                                                                                                                              West criticized the decision to                                                                                                                       



 sell   the   lots   to   Oliva   as   "encourag[ing]   future   encroachment   by   rewarding   illegal  



behavior."   West argued that he paid the $500 application fee for the privilege of being                                                                                                                                                                                                                                                                                                                                           



"kept in the loop," but alleged that he "never had a place at the negotiating table."                                                                                                                                                                                                                                                                                                                                                                               



Instead, the sale was "a package deal" on all five lots, and West was "never . . . given an                                                                                                                                                                                                                                                                                                                                                          



opportunity to revise [his] bid."                                                                                                                                          West did not, however, suggest that he would have                                                                                                                                                                                                           



                                   5                                  (...continued)  



                                                                                                                                                                                                                                                                                                                                                                                                                                                

 circulation" or even directly notifying "parties known or likely to be affected by the  

                                                                                                                                                                              

 action."  AS 38.05.945(b)(3)(A), (D).  



                                                                                                                                                                                                                          -6-                                                                                                                                                                                                            7468
  


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

                                                                                                   

raised his offer on Lots 17 and 35 or that he would have offered to purchase more lots  



                                                                                                                               

had he been "kept in the loop," nor did he explicitly make any increased offer in his  



                                                                                                                   

comments.            West  acknowledged  that  the  Land  Office  followed  its  regulatory  



                                                                                                                                  

requirements for public notice, but still generally "challenge[d] the ethics involved."  



                                                                                                                                 

                    Rather than reject West's comments as untimely, the Land Office opted to  



                                                                                                                         

treat them "as a request for reconsideration."   Nevertheless, the Land Office denied  



                                                                                                                          

West's request and upheld the best interest decision in its entirety.  The Land Office  



                                                                                                                     

refuted the notion that it required a block sale, but noted that Oliva was "not interested  



                                                                                                                                     

in purchasing anything less than all five parcels" while West was only interested in two.  



                                                                                                                              

The Land Office explained that the potential alternative of subdividing Lot 17 was  



                                                                                                                                 

"ultimately abandoned . . . because it became apparent that the parties were unlikely to  



                                                                                                                        

agree on how to subdivide the lots, and such a subdivision would have cost money,  



                                                                                                                             

without any increase in value to the lots."  And because Oliva's final offer not only  



                                                                                                                         

matched West's offer for Lots 17 and 35 but included three more, "the [Land Office]  



                                                                          

reduced its management burden and realized an above-market gain" by selling all five  



                                                                                                             

to Oliva.  The agency also rebutted West's allegations of any additional encroachments  



                                                                                                                      

and argued that its success in obtaining payment for Oliva's past use "without incurring  



                                                                                                                           

unnecessary legal expenses or risk of litigation" instead "demonstrates that the [Land  



                                                                                                                                     

Office] has and will continue to seek compensation for unauthorized use of Trust land."  



                                               

          C.        Superior Court Proceedings  



                                                                                                                                

                    West appealed the best interest decision and the Land Office's denial of his  



                                                                                                                                

request for  reconsideration to the superior  court.                            The court held  oral argument in  



                                                                                                                            

February 2019.  In addition to those issues raised in his comments to the agency, West  



                                                                                                                      

argued that the Land Office failed to abide by various state statutes or provide adequate  



                                                                                                                            

explanation for its decision. The State countered that West had not alleged any real harm  



                                                                                                           

because he received both actual and constructive notice, and his late comments were  



                                                               -7-                                                         7468
  


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

ultimately considered by the Land Office.                                                     The State also pointed out that West was not                                                



                                                                                                                             6  

disputing the validity of any of the agency's regulations,                                                                                                                               

                                                                                                                                and West did not address that  



                                        

issue on rebuttal.  



                                                                                                                                                                                            

                              The superior court affirmed the best interest decision "in large part in  



                                                                                                                                                                                             

agreement with the briefing by the State."  Applying the "reasonable basis standard" to  



                                                                                                                                                                                       

the Land Office's legal interpretations, the court found that West failed to "show[] how  



                                                                                                                                                                                      

the . . . Land Office could obtain a better return for the Trust and its beneficiaries" other  



                                                                                                                                                                                   

than through its sale to Oliva.  The court noted that "the only applicable public notice  



                                                                                                                                                                                      

requirements for the proposed sale . . . were in 11 AAC 99.050(a)," and regardless West  



                                                                                                                                                                                      

"did receive actual notice" and was "given a full opportunity to participate."  The court  

                                                                                                                                           7  stating only that it "is  

                                                                                                                                                                

also briefly commented on the validity of 11 AAC 99.020(f), 



clearly consistent and necessary to implement" the Trust Authority's governing statutes.  

                                                                                                                                                                                                   



Because the agency "did consider all reasonable alternatives" and "did comply with  

                                                                                                                                                                                       



applicable procedural requirements," the court affirmed the Land Office's best interest  

                                                                                                                                                                                 



decision.  

                      



                              West now appeals.  

                                                                          



               6              West argued that the Land Office should have applied AS 38.05.945 for                                                                                        



public notice, but at no point did he suggest that 11 AAC 99.050 was an invalid agency                                                                                           

regulation prior to this appeal. West first mentioned the issue of preemption in his reply                                                                                            

brief before the superior court in regard to 11 AAC 99.030(e), but without reference to                                                                                                      

any specific legal authority.                                   



               7              This subsection states:  "Unless otherwise specified in this chapter, every  

                                                                                                                                                                                     

provision of law applicable to other state land applies to the management of trust land  

                                                                                                                                                                      

unless its application is determined, in [a] written finding . . . , to be inconsistent, in  

                                                                                                                                                                                            

whole or in part, with [trust management principles]."  11 AAC 99.020(f).  Most of the  

                                                                                                                                                                                           

Land  Office  regulations  contain  a  similar  clause.                                                                   See,  e.g.,  11  AAC  99.030(e);  

                                                                                                                                                                         

 11 AAC 99.040(c); 11 AAC 99.050(b).  

                                                                  



                                                                                             -8-                                                                                      7468
  


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

III.        STANDARD OF REVIEW                 



                                                                                                                                                   8  

                        We review the merits of administrative decisions on appeal de novo.                                                           For  



                                                                                                                                                  

questions of law in administrative appeals we apply the reasonable basis standard "when  



                                                                                                                                                        

the  interpretation  at  issue  implicates  agency  expertise  or  the  determination  of  



                                                                                                                                      9  

                                                                                                                                                      

fundamental policies within the scope of the agency's statutory functions."                                                              Under that  



                                                                                                                                                        

standard, we only "seek to determine whether the agency's decision is supported by the  



                                                                         10  

                                                                

facts and has a reasonable basis in law." 



IV.         DISCUSSION  



                                                                                                   

            A.          History Of The Alaska Mental Health Trust  



                                                                                                                                                 

                        The issues West raises require us to revisit the history of the Alaska Mental  



                                                                                              11  

                                                                                                                                                           

Health Trust for the first time in over twenty years.                                              This is also the first appeal of a  



                                                                     

Land Office decision to come before us.  



                                                                                                                                                    

                        Congress passed the Alaska Mental Health Enabling Act (Act) in 1956  



                                                                                                                                                 

partially for the purpose of creating and implementing "an integrated mental health  



                                                                              12  

                                                                                                                                                         

program" in the soon-to-be State of Alaska.                                       To effectuate this goal, the Act granted up  



            8           Handley v. State, Dep't of Revenue                              , 838 P.2d 1231, 1233 (Alaska 1992)                       



(citing  Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co.                                                , 746 P.2d 896, 903 (Alaska           

 1987)).  



            9           Haar v. State, Dep't of Admin., Div. of Motor Vehicles, 349 P.3d 173, 180  

                                                                                                                                                      

(Alaska 2015) (quoting Marathon Oil Co. v. State, Dep't of Nat. Res., 254 P.3d 1078,  

                                                                                                                                         

 1082 (Alaska 2011)).  

                           



            10          Id.  at 180-81  (quoting Davis Wright Tremaine LLP  v.  State,  Dep't of  

                                                                                                                                                         

Admin. , 324 P.3d 293, 299 (Alaska 2014)).  

                                                                  



            11          See Weiss II, 939 P.2d 380 (Alaska 1997).  

                                                                                          



            12          Pub. L. No. 84-830, § 201, 70 Stat. 709, 709 (1956).  

                                                                                                           



                                                                            -9-                                                                    7468
  


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

                                                                                                                                                 13  

to "one million acres from the public lands of the United States in Alaska" to the State.                                                            



                                                  

The Act provided that those lands  



                                                                                                              

                       shall be administered . . . as a public trust and such proceeds  

                                                                                                            

                       and  income  shall  first  be  applied  to  meet  the  necessary  

                                                                                                                     

                       expenses  of  the  mental  health  program  of  Alaska.                                      Such  

                                                                                                                           

                       lands, income, and proceeds shall be managed and utilized in  

                                                                                                                      

                       such manner as the Legislature of Alaska may provide. Such  

                                                                                                                      

                       lands . . . may be sold . . . or otherwise disposed of in such  

                                                                                                                      

                       manner as the Legislature of Alaska may provide . . . . The  

                                                                                                           

                       authority of the Legislature of Alaska under this subsection  

                                                                                                            

                       shall be exercised in a manner compatible with the conditions  

                                                                                                                         [14]  

                                                                                                                               

                       and requirements imposed by other provisions of this Act. 



Despite this directive, the State did not maintain a separate account for Trust lands for  

                                                                                    



over 20 years, and in 1978 the legislature formally redesignated those lands "as general  

                                                                                                                                        



grant land" to be managed by DNR and disposed of in accordance with applicable state  

                                                                                                                                             

law.15   A number of individuals filed a class-action lawsuit in 1982 alleging a breach of  

                                                                                                                                                 

                                                                                 16  In Weiss I we held that the State was  

the public trust as a result of that redesignation.                                                                                           

                                                         

                                                                                                17  and we remanded to the trial  

not empowered to unilaterally terminate that public trust,                                                                                    

                                                                                         



court for further proceedings, stating that its goal should be "to restore the trust to its  

                                                                                                                                                

position just prior to the conveyance effected by the redesignation legislation."18  

                                                                                                                   



            13         Id.  §  202(a),  70  Stat.  at  711.  



            14         Id.  §  202(e),  70  Stat.  at  712.  



            15         State  v.  Weiss  (Weiss  I),  706  P.2d  681,  682  (Alaska  1985)  (quoting  ch.  181,  



§  3(a),  SLA   1978).  



            16         Id.  at  682.  



            17         Id.  at  683.  



            18         Id.  at  684.  



                                                                      -10-                                                                 7468
  


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

                     Following our          decision in       Weiss I    thelegislature         made a number ofattempts       



                                                                  19  

at settlingtheclass-action               litigants' claims,                                                                

                                                                     includingthecreation oftheTrustAuthority  

             20                                                                                                             21 which  

                The negotiations culminated in the passage of House Bill 201 in 1994,                                           

                                                                                                                    

     

in 1991. 



in essence created the present statutory scheme governing the management and disposal  

                                                                                                                             

of Trust land.22          Relevant to our discussion here, HB 201 directed DNR to "establish a  

                                                                                                                                        

separateunit with responsibility for management ofthe mental health trust land,"23 which  

                                                                                                                                



was further instructed to manage Trust land "consistent with the trust principles imposed  

                                                                                                                             

on the state by the Alaska Mental Health Enabling Act."24                                         Secondary to those trust  

                                                                                                                                  



principles, HB 201 required Trust land to be managed "under those provisions of law  

                                                                                                                                    



applicable to other state land" and directed DNR to adopt regulations addressing, inter  

                                                                                                                                  

alia, "management for the benefit of the trust."25                             Complying with this directive, DNR  

                                                                                                                 



                                                                                                                            26  

created the Land Office and in 1997 promulgated the regulations at issue here.                                                   

                                                                                                                     



           19        See   Weiss  II,  939  P.2d  380,  384-85  (Alaska   1997).  



           20        Id.  at  385;  see  also  ch.  66,  §§   10,  26,  SLA   1991.  



           21         Weiss  II,  939  P.2d  at  385;  see  also  chs.  5-6,  FSSLA   1994.  



           22        See   Weiss  II,  939  P.2d  at  385-86.  



           23        AS  44.37.050(a);  ch.  5,  §  22,  FSSLA   1994.  



           24        AS  38.05.801(a);  ch.  5,  §   17,  FSSLA   1994.  



           25        AS  38.05.801(b)-(c).  



           26        See  Alaska  Administrative  Code  Register  141,  at  38-46  (Apr.  1997)  (adding  



chapter  99  to  title   11).  



                                                                 -11-                                                            7468
  


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

                         Not all of the parties agreed with the proposed settlement, however, and the                                                       



                                                                                               27  

issue once again ended up before us in                                        Weiss II        .                                                          

                                                                                                     One area of disagreement was  



                                                                                                                                                     

HB201'slandmanagementprovisions; thelitigants argued "that themanagement regime  



                                                                                                                                                           

is 'illegal' because it allegedly does not require trust lands to be managed 'solely in the  

                                                                 28  However, recognizing the "express language" in  

                                                                                                                                                             

best interest of the beneficiaries.' " 



HB 201 requiring "manage[ment] consistent with . . . trust principles," we agreed with  

                                                                                                                                                         



thesuperior court's reasoning"that thesettlement's managementstandardconformswith  

                                                                                                                                                         

the requirements of the trust."29                           We concluded that the superior court did not abuse its  

                                                                                                                                                             

discretion when it approved the settlement terms contained in HB 201.30                                                                       The Land  

                                                                                                                                                       



Office's regulations were not addressed in Weiss II.  

                                                                                            



            B.	          The Land Office's Decision To Sell The Five Lots In Question To Oliva  

                                                                                                                                                       

                         Was In The Trust's Best Interest.  

                                                                           



                         The central question in West's appeal is whether the Land Office's best  

                                                                                                                                                         



interest decision actually furthered the Trust's best interest.   The applicable agency  

                                                                                                                                                   



regulation  lays  out five "management principles" that the Land Office relies on  to  

                                                                                                                                                             

determine whether a sale is in the Trust's best interest.31  

                                                                                                                                                              

                                                                                                         Of particular relevance here is  



                                                                                                                                          32  

                                                                                                                               

the first principle of "maximization of long-term revenue from trust land." 



                                                                                                                                                      

                         West argues that the Land Office's decision "did not maximize the return  



                                                                                                                                                

to the Trust" and thus the sale was not in its best interest.  The crux of West's argument  



            27           939 P.2d at 386.
       



            28  

                                    

                         Id. at 395.
  



            29
          Id.  (quoting AS 38.05.801(a)).     



            30           Id. at 402.  

                                    



            31           11 AAC 99.020(c).     



            32  

                                          

                         11 AAC 99.020(c)(1).  



                                                                            -12-	                                                                      7468
  


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

                                                                                                                        

is that he "would have paid more" or "would have offered to purchase all five parcels"  



                                                                                                                      

if the Land Office had given him the opportunity.  As the State points out, however,  



                                                                                                                                

West's present willingness to increase his offer after-the-fact "is not supported by the  



                                                                                                                                      

record."  Throughout the proceedings West only exhibited interest in Lots 17 and 35;  



                                                                                                                           

indeed, rather than affirmatively increasing his offer or seeking to compete with Oliva,  



                                                                                                                              

he instead decreased his offer and sought "to avoid a bidding war." Although West touts  



                                                                                                                         

his continued  "willingness to  negotiate," that does not offer  support  to  his present  



                                                                                                                            

contention.  The Land Office's denial of reconsideration noted that whereas West never  



                                                                                                                              

increased his offer, Oliva matched West's offer of 30% above fair market value on Lots  



                                                                                                                                      

17 and 35 and exceeded it by offering 25% above fair market value for three more lots.  



                                                                                                                                

Furthermore, because Oliva was "only interested in purchasing all five parcels" and the  



                                                                                                                              

parties were unable to agree on subdivision, selling Lots 17 and 35 to West "would have  



                                                                                                                                

resulted in additional management costs" for the remaining three lots and "would not  



                                                                    

have resolved the unauthorized use issues."  



                                                                                                                         

                    West's secondary argument is that the Land Office "le[ft] potential revenue  



                                                                                                                              

on the table" by not "pursu[ing] the claims for trespass and encroachment on the four  



                                                                                                                             

other parcels of land." This contention is likewise devoid of support in the record, aside  



                                                                                                                               

from West's own unsubstantiated allegations. To the contrary, the Land Office was able  



                                                                                                                          

to negotiate an additional $21,000 settlement for past encroachments, more than double  



                                                                                                                

Oliva's initial offer. TheLand Office's sitevisit uncovered no evidence of encroachment  



                                                                                                                               

on any lots other than Lot 17.   Altogether, the total proceeds from the land sale and  



                                                                                                                                

settlement exceeded the Land Office's estimated projection by $17,150. A review of the  



                                                                                                                              

whole record reveals ample evidence that supports the best interest decision.  It was  



                                                                                                                            

therefore reasonable for the Land Office to conclude that the sale of five lots to Oliva  



                                                                          

maximized revenue and was in the Trust's best interest.  



                                                               -13-                                                         7468
  


----------------------- Page 14-----------------------

              C.	           West's   Remaining   Arguments   Were   Not   Raised   Below   And   Are  

                            Deemed Waived.   



                            West additionally argues that the Land Office's public notice regulation is                                                                             



inconsistent with the governing statute and is thus invalid.                                                                However, West has waived                    



this argument as it is raised here for the first time.                                                    Issues that are "inadequately briefed                          



or raised for the first time in a reply brief" on an administrative appeal to the superior                                                                            



                                                             33  

court are considered waived.                                                                                                                                                  

                                                                   The validity of 11 AAC 99.050 was not one of the nine  



                                                                                                                                                                             

issues West initially brought for review before the superior court.  In his opening brief  



                                                                                                                                                                

before the superior court, West never suggested that any of the Land Office's regulations  

were invalid, nor did he cite any case to provide the applicable legal standard.34  West  



                                                                                                                                                                            

first questioned the validity of the agency's regulations in his reply brief, but he again  



                                                                                                                                                                                 

failed to cite any applicable case law in support and at no point did he imply that the  



                                                                                                                                                                               

public notice regulation was invalid.   Nor did West squarely raise the issue at oral  



                                                                                                                                                                             

argument before the superior court.  Instead, the State specifically pointed out that West  



                                                                                                                                                                              

never  alleged  the  invalidity  of  any  regulation,  and  West  did  not  contest  that  



                                                                                                                          

characterization on rebuttal.  The superior court likewise did not appear to understand  



                                                                                                                                                                                

West  to  have been  challenging the regulations'  validity  and  only  briefly noted  the  



                                                                                                                                                                               

general presumption of validity in passing.   West now argues for the first time that  



                                                                                                                                          

 11 AAC 99.050 is an invalid regulation.  But this issue has been waived.  



                                                                                                                                                                                     

                            West also argues that the Land Office violated its own regulations and a  



                                                                  

number of other statutes.  But none of these issues were raised in his initial comments  



              33            Alyeska Pipeline Serv. Co. v. State                                       , 288 P.3d 736, 743 (Alaska 2012).                           



              34            Although West argued opaquely that "regulations do not trump statutes,"  

                                                                                                                                                                    

he cited no authority for this proposition and only discussed a legislative audit and some  

                                                                                                                                                                             

newspaper articles.  

                                           



                                                                                       -14-	                                                                                 7468
  


----------------------- Page 15-----------------------

                                                              35  

to the Land Office.                                                  West's remaining arguments are thus waived for failure to initially                                                                                                                               



                                                                                                                                                   36  

raise them before the administrative agency.                                                                                                                                                                                                                                           

                                                                                                                                                            With no other issues properly before us,  



            

we affirm.  



V.                     CONCLUSION  



                                             We AFFIRM the Land Office's best interest decision approving the sale of  

                                                                                                                                                                                                                                                                                          



five lots of Trust land to Oliva.  

                                                                                   



                      35                     See   AS   38.05.035(l)   (limiting   points   on   appeal   to   those   presented   for  



reconsideration); 11 AAC 99.060(a)-(c) (providing for appeal contingent on request for                                                                                                                                                                                                 

reconsideration).   West's late comments to the Land Office - which were accepted as                                                                                                                                                                                                      

a request for reconsideration - focused exclusively on the Trust's best interest and what                                                                                                                                                                                        

he described as "[u]nfair business practices." The                                                                                                                 present statutory and regulatory issues  

were not raised until West appealed to the superior court. West's validity challenge was                                                                                                                                                                                            

also not raised in his initial comments, but that failure is potentially excusable as the                                                                                                                                                                                             

validity of a regulation falls outside the scope of what an agency has authority to decide.                                                                                                                                                                                                         

See   AS   44.62.300(a);   AS   44.62.560(e);   AS   44.62.570(b).     Regardless,  failure   to  

adequately brief an issue before the superior court is fatal.                                                                                                                                         See Alyeska Pipeline                                                      , 288   

P.3d at 743.             



                      36                     It is a well-established rule of appellate review that "it is inappropriate for  

                                                                                                                                                                                                                                                                                       

courts reviewing appeals of agency decisions to consider arguments not raised before the  

                                                                                                                                                                                                                                                                                       

administrative agency involved."                                                                                        Walker v. State, Dep't of Corr., 421 P.3d 74, 78  

                                                                                                                                                                                                                                                                                        

(Alaska 2018) (quoting 1000 Friends of Md. v. Browner, 265 F.3d 216, 227 (4th Cir.  

                                                                                                                                                                                                                                                                                    

2001)); accord 2 AM. J   UR. 2                                                                D  Administrative Law                                                   § 512 (2014).                                   Although the superior                          

                                                       

court   addressed   each   of   West's   arguments   below   and   the   applicability   of   issue  

exhaustion was never briefed by the parties, we nonetheless decline to reach issues not                                                                                                                                                                                               

adequately preserved.                                                      We reiterate that the superior court is generally not obligated to                                                                                                                                             

pass on issues not raised to the administrative agency when acting as an intermediate                                                                                                                                                                  

appellate court.                                     See Thoeni v. Consumer Elec. Servs.                                                                                         , 151 P.3d 1249, 1256-57 (Alaska                                                      

2007).  



                                                                                                                                          -15-                                                                                                                                   7468
  

Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC