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Beecher v. City of Cordova

Supreme Court of Alaska

January 19, 2018

CAROL BEECHER and PERRY BEECHER, Appellants,
v.
CITY OF CORDOVA, Appellee.

         Appeal from the Superior Court of the State of Alaska No. 3CO-02-00011 CI, Third Judicial District, Cordova, Daniel Schally, Judge pro tem.

          Carol Beecher and Perry Beecher, pro se, Anchorage, Appellants.

          Holly C. Wells and Jack R. McKenna, Birch Horton Bittner & Cherot, Anchorage, for Appellee.

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

          OPINION

          MAASSEN, JUSTICE.

         I. INTRODUCTION

         A city evicted commercial tenants from city-owned land and was granted a money judgment against them for unpaid rent and sales taxes. The tenants left behind various improvements, as well as items of personal property related to their operation of a marine fueling facility on the land. The city pursued collection of its money judgment for several years before suspending its efforts; about eight years later it resumed its attempts to collect. The tenants, contending that they had reasonably assumed by the passage of time that the judgment had been satisfied, moved for an accounting of their left-behind property and the amount still owing on the judgment.

         The city informed the superior court that it had executed only on bank accounts and wages and that several improvements had reverted to city ownership and therefore did not count against the judgment. It claimed not to know what happened to the rest of the property the tenants identified as having been left behind. The superior court found the city's response sufficient and allowed execution to continue.

         The tenants appeal, arguing that they were entitled to a better accounting of their left-behind property and that the city is estopped from contending that the judgment is still unsatisfied. We agree in part. We hold that it was the city's burden to produce evidence of the property's disposition and that it failed to carry this burden. We also hold that there are genuine issues of material fact about whether the city is estopped from contending that the judgment remains unsatisfied. We therefore reverse the superior court's order accepting the accounting and allowing execution to continue; we remand for further proceedings in the superior court.

         II. FACTS AND PROCEEDINGS

         A. Facts

         Carol and Perry Beecher entered into a ground lease with the City of Cordova in 1997 to operate a marine fueling facility on City-owned land.[1] They eventually fell behind on the rent. In January 2002 the City delivered a notice to quit, informing the Beechers that they owed $30, 527.22 in past-due rent and had until February 4 to bring it current. The notice warned that the lease would terminate if the Beechers did not meet the February 4 deadline. But the Beechers did not pay the past-due rent or vacate the property, and in March the City delivered an updated notice to quit. This notice informed the Beechers that the lease had terminated on February 4; it also reminded the Beechers that, pursuant to paragraph 9 of the lease, they had 90 days from termination - until May 5 - to remove any improvements, which would otherwise become the property of the City. The City also recorded notices of sales tax liens against the Beechers' corporations, covering all their real and personal property in the Cordova Recording District.

         The Beechers still did not vacate the premises, and in April the City filed a complaint against them in the superior court seeking eviction, foreclosure of the sales tax liens, and a money judgment for both the past-due rent and unpaid sales taxes. The court ordered an eviction and later entered a money judgment against the Beechers in the amount of $118, 759.61. The court also ruled that "by virtue of the lease" the City had gained "color of title" to any improvements remaining on the premises. The claim for lien foreclosure was apparently dropped; the record contains no further reference to the tax liens.

         The Beechers then vacated the premises, but they left behind some personal property, including fuel tanks, vehicles, trailers, parts, and appliances. Nearly a year later, the City's attorney, in a March 2003 memo to the City manager, recommended that the City attempt to clarify ownership of this left-behind property. In April the superior court ordered debtor's examinations to occur in May. The City filed creditor's affidavits stating that it would attempt to satisfy the judgment by levying against the Beechers' bank accounts, a tug boat, a "Landing craft, " two undeveloped tracts of real property, a "Fuel Truck, " a "Backhoe, " the "Marine fuel facility, " and a "Gas Station." In July the clerk of court issued writs of execution.

         Of the items identified in the creditor's affidavits, the City executed only against the Beechers' bank accounts. It eventually recovered more of the judgment from their wages and permanent fund dividend checks. But in 2005, with the bulk of the judgment still unpaid, the City ceased its collection efforts.

         Eight years went by; then in January 2013 the City obtained and recorded a renewal judgment. After learning that the City was again garnishing their wages, the Beechers sent the City a letter asking for an accounting of the judgment and the City's collection activities to date, specifically requesting "bill(s) of sale, " public advertisements, and "dates of sales [of] any and all property seized and sold by the City." The City did not respond, so the Beechers retained a lawyer and repeated their request. Their second letter to the City described the Beechers' "equipment located at the Marine Fuel facility [as] including fuel trucks, tanker trailers, ... assorted parts, tools, a Cat 235 excavator, and other pieces of equipment, " and asked, "What happened to these items? Were they sold? Was the amount of the sale deducted from the judgment?" The record again shows no response from the City.

         B. Proceedings

         The Beechers next filed a motion in superior court for an accounting of the City's collection efforts and the outstanding amount of the judgment. The City responded with an affidavit from its finance director, Jon Stavig. Stavig stated that the City had executed on the Beechers' bank accounts and wages, and he submitted a record of those amounts, which added up to over $34, 000. He averred "[u]pon information and belief that the City had sold certain "improvements" from the Beechers' fueling facility, "which included the floating fuel dock and gangway ramp, " but that improvements belonged to the City pursuant to paragraph 9 of the lease and therefore their sale did "not reduce the amount owed under the [j]udgment." Stavig reported that the City had not executed on the tug and landing craft identified in its 2003 creditor's affidavit as possible subjects for execution; instead, the two vessels had been foreclosed upon and sold at auction by a ships' mortgage lender. And Stavig also reported that two parcels of real property listed in the creditor's affidavit had been foreclosed upon by other ...


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