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Fink v. Municipality of Anchorage

Supreme Court of Alaska

September 16, 2016

MATTHEW FINK and DIANE WILKE, Appellants,
v.
MUNICIPALITY OF ANCHORAGE, Appellee.

         Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, No. 3AN-07-12346 CI Andrew Guidi, Judge.

          Michael T. Stehle, The Law Office of Michael Stehle, PC, Anchorage, for Appellants.

          James M. Gorski, Hughes Gorski Seedorf Odsen & Tervooren, LLC, Anchorage, Robert P. Owens, Assistant Municipal Attorney, and William D. Falsey, Municipal Attorney, Anchorage, for Appellee.

          Before: Stowers, Chief Justice, Fabe, Winfree, and Bolger, Justices. [Maassen, Justice, not participating.]

          OPINION

          STOWERS, CHIEF JUSTICE.

         I. INTRODUCTION

         The dispute in this case concerns a narrow strip of land in the Turnagain area of Anchorage immediately west of Lynn Ary Park and bordering Knik Arm. The land is in the shape of a parallelogram; its long sides run in a northeasterly direction up Knik Arm and its short sides run north-south.[1]

         The property was initially subdivided in May 1952 as part of Block K, Turnagain Heights Subdivision. As initially platted the northern subdivision boundary stopped just south of a 50-70 foot bluff. The bluff itself was just south of the mean high-tide line[2] of Knik Arm; the land between the northern boundary of the lots and the mean high-tide line was not developable land. Appellants Matthew Fink and Diane Wilke (the lot owners) currently own four of the six lots at issue in this case.

         During the Good Friday Earthquake of 1964, the bluff face flattened out and slid northward into Knik Arm. This caused the existing land between the pre-earthquake bluff face and the pre-earthquake mean high-tide line to become developable and created new land between the pre-earthquake mean high-tide line and the post-earthquake mean high-tide line. Despite the plats of the subdivision apparently indicating that their lots' northern boundary is at the top of the pre-earthquake bluff face, the lot owners alleged that their property actually extends north to the pre-earthquake mean high-tide line. The parties do not dispute that the Municipality of Anchorage owns the new land between the pre-earthquake mean high-tide line and the post-earthquake mean high-tide line.

         The Municipality argued that the lot owners did not have a substantial interest in the disputed property and that the statute of limitations barred the lot owners' claim. The superior court concluded that the lot owners failed to show a substantial interest in the disputed parcel and that, even if the lot owners did have a substantial interest, the statute of limitations barred their claim. We affirm.

         II. FACTS AND PROCEEDINGS A. Facts

         In 1943 Lynn Ary conveyed to Marvin Marston by warranty deed a piece of property in what is now the Turnagain area of Anchorage. On its face, this conveyance does not appear to extend to the pre-earthquake mean high-tide line; the northern boundary appears to terminate at the top of a 50-70 foot bluff face, short of the mean high-tide line.

         In September 1946 Marston conveyed two deeds to Union Bank, one of which was a warranty deed conveying to Union Bank almost all of the 1943 conveyance from Ary to Marston except for a fifty foot strip of land on the western edge of the parcel.[3]

         In June 1949 Ary conveyed to Marston via quitclaim deed the "Beachfront Deed, " described as "[a]ll my right, title and interest to the Beach and Waterfront lying in front of the 550 feet originally sold to [Marvin] Marston out of the west side waterfront of the Lynn Ary Homestead and adjoining the Simonson Homestead." Marston recorded the Beachfront Deed in 1954, and he never conveyed the property to Union Bank. The ownership of the parcel described in the Beachfront Deed is at issue in this case.

         Over the years several plats of the area were created and recorded. Plat P-67, recorded in July 1947, was a topography of the land owned by Ary and Marston. Plat P-67B was created in May 1948 and recorded in May 1952. A "Master Plan" for Turnagain Heights was created in April 1949. Plat P-67E was created in May 1952 and recorded in June of that year. Plat P-67E created a subdivision known as Block K, Turnagain Heights Subdivision. This subdivision essentially contains the land conveyed by Ary to Marston in 1943 and later from Marston to Union Bank in 1946. Each of the plats appears to indicate that the lots' northern boundary is at the top of the bluff face.

         In September 1952 Union Bank conveyed via warranty deeds several lots in Block K, including Lots 2-5, the lots currently owned by Fink and Wilke. This deed was recorded on September 21, 1953. The lots changed hands a number of times over the years. In 1957 the owners of Lots 1 -6 re-platted the lots as Lots 1A-6A in plat P-424. Marston owned Lots 1 and 2. The re-plat altered the internal boundary lines slightly, but it did not change the northernmost boundary. Plat P-424 is the current and official plat of the subdivision, and it is incorporated by reference into the deeds owned by Fink and Wilke. Fink purchased Lots 2A and 3 A in 1991, and Wilke acquired Lot 5A in 2000 and Lot 4A in 2012.

         When Block K was initially platted in plat P-67E, the northern boundary of the lots appeared to terminate in the north at a steep, 50-70 foot bluff, with tidal mud flats below. The 1964 Good Friday Earthquake seriously damaged the entire Turnagain area and caused the bluff face at the northern edge of Block K to flatten and slide northward toward Knik Arm. This slide created developable land on the former bluff face and mud flats and also created new land between the pre-earthquake mean high-tide line and the post-earthquake mean high-tide line.

         In 1985-1986 the Municipality constructed the Tony Knowles Coastal Trail along the northern edge of the disputed property along the pre-earthquake mean high-tide line.[4]

         The parties do not dispute that the Municipality owns the new land between the pre-earthquake mean high-tide line and the post-earthquake mean high-tide line; they only dispute whether the northern boundary of the disputed property terminated at the top of the bluff or at the pre-earthquake mean high-tide line at the base of the bluff.

         B. Proceedings

         The owners of Lots 2A-5A sued the Municipality seeking relief under the Earthslide Relief Act[5] and to quiet title in the disputed property. Because those are both equitable claims, the lot owners did not request a jury trial. The Municipality answered the lot owners' complaint, brought legal and equitable counterclaims, and asserted that the lot owners' claims were barred by the statute of limitations; the Municipality also demanded a jury trial "on all issues so triable."

         The Municipality next moved for summary judgment to dismiss the lot owners' quiet title claim, arguing that the Municipality was in full possession of the disputed property.[6] The lot owners opposed and filed a Second Amended Complaint adding a claim for ejectment under AS 09.45.630 and an equitable claim for the cancellation of the quitclaim deed granted by Union Bank to the Municipality.

         The superior court granted the Municipality's motion for partial summary judgment on the quiet title cause of action because the Municipality was in possession of the disputed parcel; the court noted that "possession is a required element of an action to quiet title" and that "the appropriate remedy [for a plaintiff not in possession of the property] is a suit in ejectment rather than a suit to quiet title."[7]

         The Municipality then moved for summary judgment on the lot owners' request to cancel the Municipality's deed from Union Bank, arguing that the lot owners had an adequate remedy at law and were therefore prohibited from bringing equitable claims. The superior court denied the Municipality's motion but decided to bifurcate the trial and "first conduct a bench trial on the preliminary issue of who has proper title to the disputed property." It noted that because "the validity of the parties' competing title claims will be most similar to a common law quiet title action-a traditionally equitable action - the matter of title will be bench tried."[8] The court also determined that, while the Municipality's affirmative defense of adverse possession is traditionally an equitable defense and therefore could be tried at the same time as the other equitable claims, "the interests of promoting settlement and providing a more orderly disposition of the case" required that "the matter of adverse possession should not be adjudicated until after there has been a resolution of the title issue."

         Following the order bifurcating the trial and in order to narrow the issues at trial, the lot owners moved for a ruling from the court that P-424, the official plat of their lots, was ambiguous as to the lots' northern boundary. The superior court granted the motion; it determined that P-424 provided no indication of the original parties' intent and noted that lots are presumed to extend to the water's edge where there is no developable land platted between the lots and the water.[9]

         After a seven-day bench trial, the superior court issued its findings of fact and conclusions of law. The court, while acknowledging that P-424 was ambiguous, found that Marston intended to reserve the land between the top of the bluff and the pre-earthquake mean high-tide line for himself.[10] The court agreed with the Municipality's surveyor, Stan Ponsness, and the deposition testimony of former Municipal surveyor, Tom Knox; the two explained that the description of the property in the deed led to a conclusion that the lots terminated at the top of the bluff.[11] The court found that the platting history also supported the surveyors' conclusions; the northern boundary to the deeded tract was drawn at the top of the bluff on P-67, P-67B, and the "Master Plan" depicting Block K. And the court found that plat P-67E clearly listed fixed bearings and distances from a new fixed point of reference that showed the plats as existing inland from the bluff face. Plat 424, which was a re-plat of plat P-67E, maintained the dimensions of P-67E.

         The superior court also referred to anecdotal evidence that suggested that the lots extended only to the top of the pre-earthquake bluff. John Dillman, a municipal appraiser, spoke with then-current and former Block K lot owners in the course of appraising the value of the Coastal Trail easement through the area; the court found that Dillman had concluded that many of the then-current and former owners believed they had purchased bluff lots. Brooke Marston, son of Marvin Marston, testified that his father intended to reserve the bluff face and beachfront to protect it from erosion. One former lot owner, Judy Johanson, spoke to Marston before purchasing her lot and testified that Marston told her that her lot extended to the ocean, but the court determined that Johanson had misunderstood Marston's promise that no one would build in front of her lot. Thus, the court concluded that the lot owners failed to meet their burden of proving title to the land superior to the Municipality's title.[12] The lot owners appeal.

         III. STANDARD OF REVIEW

         "We review factual findings for clear error and legal conclusions de novo."[13] "A factual finding is clearly erroneous if, after reviewing the record in the light most favorable to the prevailing party, we are definitely and firmly convinced that the finding is mistaken."[14] "Conclusions about the parties' intent drawn by the trial court after sifting and weighing . . . evidence [extrinsic to a deed] are conclusions of fact..., "[15]

         The interpretation of a statute[16] and "' [w]hether a deed is ambiguous [are] question[s] of law, ' and' [w]e review legal questions de novo, adopt[ing] the rule of law that is most persuasive in light of precedent, reason, and policy.' "[17] "[W]hether the trial court applied the correct legal rule in exercising its discretion is a question of law that we review de novo ..., "[18]

         "Bifurcation of a trial is generally within the discretion of a trial court, and a ruling on this issue will not be reversed absent an abuse of that discretion."[19] The determination of which party is the prevailing party is also subject to the trial court's discretion and is reviewable only for abuse of discretion.[20] "We will find an abuse of discretion when the decision on review is manifestly unreasonable."[21]

         IV. DISCUSSION

         A. The Superior Court Did Not Abuse Its Discretion When It Bifurcated The Title Claim From The Ejectment Claim.

         Despite the Municipality's demand for a jury trial "on all issues so triable, " the superior court first conducted a bench trial to determine ownership of the parcel before trying the lot owners' ejectment claim to a jury. The lot owners argue that the court erred by denying their right to a jury trial because an ejectment claim is an action at law that must be tried by a jury[22] and because they did not consent to a bench trial. The Municipality responds that the lot owners consented to a bench trial on their title claim. We conclude that, although the lot owners were initially entitled to a jury trial, they consented to a bench trial on the title claim and therefore waived their right to a jury trial as to that claim.

         The Municipality's answer to the lot owners' complaint timely requested a jury trial, [23] and the lot owners later added an ejectment claim, which is an action at law and therefore eligible for a jury trial.[24] In Shope v. Sims, a case involving competing mining claims, we reversed a superior court ruling that dismissed the plaintiffs' ejectment claim and ordered a bench trial on the remaining equitable claims.[25] We adopted the rule from Beacon Theatres, Inc. v. Westover[26] and held that "when a case involves both legal and equitable claims, the facts common to such claims must be tried to a jury if a proper demand is made."[27] We noted, "By implying that the plaintiffs could maintain an ejectment claim only after they prevailed in the equitable claims, the superior court was essentially requiring the equitable claims to be tried first."[28] In the case before us now, because the lot owners' legal and equitable claims both required showing a legal interest in the property, they were entitled to a jury trial unless they waived their right to a jury trial.[29]

         A jury trial, once demanded, "shall be by jury, unless... the parties or their attorneys of record, by written stipulation filed with the court or by an oral stipulation made in open court, consent to trial by the court sitting without a jury."[30] Here, after the superior court issued its bifurcation order, the parties jointly filed a Proposed Amended Pretrial Order. That proposed order discussed the logistics for the bifurcated trial and stated that "the preliminary issue of who has superior title to the disputed parcel shall be decided during Phase 1 of the trial." The Municipality argues that this proposed joint order constituted a written stipulation to a bench trial. The Municipality further notes that the lot owners never objected to a bench trial after the superior court issued its order bifurcating the title issue from the ejectment claim. We agree and conclude that the lot owners waived their right to a jury trial as to the title claim.

         In Hollembaek v. Alaska Rural Rehabilitation Corp., a case involving Hollembaek's default on a promissory note, both parties signed a pre-trial order stipulating to a bench trial.[31] Hollembaek later requested a jury trial, but that request was not timely.[32] Hollembaek argued on appeal that the pre-trial order could not be considered a waiver of his right to a jury because he did not know that he was agreeing to a bench trial and because he had no authority to waive trial by jury.[33] But we noted that Hollembaek's counsel made no specific motion to amend the pre-trial order and that we had previously upheld the binding effect of pre-trial orders in Fairbanks Publishing Co. v. Francisco.[34] In Hollembaek we determined that "[t]he effect of [Hollembaek's] counsel's signing of the pre-trial order, which was also signed by the judge, was to officially establish, as a rule governing the trial of the case, that trial was to be without a jury."[35]

         In White v. McGinnis, [36] the Ninth Circuit interpreted Federal Rule of Civil Procedure 38(d), which provides that "[a] party waives a jury trial unless its demand is properly served and filed[;] [a] proper demand may be withdrawn only if the parties consent."[37] White had filed a civil rights claim and made a timely jury demand.[38]The trial court then notified the parties that the case was set for a bench trial, and White failed to object.[39] The Ninth Circuit noted that Rule 39(a)[40] requires an oral or written stipulation by the parties withdrawing the jury trial demand, but it found that conduct by the parties that evinces consent and appears on the record is sufficient to constitute a proper withdrawal and waiver.[41] The Ninth Circuit subsequently held that White's failure to object to a bench trial was sufficient to waive his timely jury demand.[42]

         Both of these cases support our holding that because the lot owners failed to object to a bench trial in any meaningful way after the superior court's bifurcation order and the parties' joint filing of the Proposed Amended Pretrial Order, the lot owners effectively waived their right to a jury trial on the title issue. We conclude the superior court did not abuse its discretion in conducting a bench trial on the title claim.

         B. The Superior Court Did Not Err When It Concluded That The Lot Owners Failed To Prove A Legal Interest In The Disputed Property.

         The lot owners contend that the superior court erred when it failed to grant them title to the disputed property. In order to prove their quiet title claims, the lot owners were required to show that they had a substantial interest in the disputed parcel and that their interest was superior to the Municipality's interest.[43] In order to prove their ejectment claim, the lot owners were required to show that they had a "legal estate" in the property and "a present right to possession of the property."[44] In a quiet title or ejectment action, the plaintiffs must prevail on the strength of their own title and not on the weakness of the defendants' title.[45] The lot owners claim that they have a substantial interest in the property because (1) the plat and evidence produced at trial were ambiguous as to the subdividers' intent; (2) they were presumed to have title; and (3) the court clearly erred when it found that Marston intended to reserve title to the disputed parcel. And the lot owners argue that their substantial interest in the property was superior to the Municipality's interest because the Municipality had no interest at all in the property. The superior court concluded that the lot owners failed to show a substantial interest in the property, and we hold that the court's conclusion was not error.

         In order to determine whether the lot owners have a substantial interest in the disputed property, we must interpret their deed. "The touchstone of deed interpretation is the intent of the parties, and where possible, the intentions of the parties will be given effect."[46] "We have instructed that 'a three-step analysis should be employed in interpreting a deed' "[47]:

"The proper first step in deed construction is to look to the four corners of the document to see if it unambiguously presents the parties' intent...." If a deed when "taken as a whole" is open to only one reasonable interpretation, the interpreting court "need go no further." "Whether a deed is ambiguous is a question of law."
Once a court determines that a deed is ambiguous, "the next step in determining the parties' intent is a consideration of the facts and circumstances ...

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