DESMOND E. SCHACHT, Appellant,
TERRY KUNIMUNE, Appellee.
from the Superior Court No. 3AN- 17-06669 CI of the State of
Alaska, Third Judicial District, Anchorage, Frank A.
M. Libbey, Robert M. Libbey Law Office, Anchorage, for
W. Pease, Burr, Pease & Kurtz, PC, Anchorage, and D.
Jason Davis, Davis Law Group, PLC, Pacific Palisades,
California, for Appellee.
Before: Bolger, Chief Justice, Winfree, Stowers, and Carney,
opened joint checking and savings accounts with his father. A
few years later the son was injured in a car accident,
settled his claim against the other driver, and deposited the
settlement check into his joint savings account. A creditor
of the father later levied the joint accounts and obtained
approximately $90, 000 - essentially all of it traceable to
the son's settlement money - in partial satisfaction of
the creditor's judgment against the father. The son
intervened in the collection action, arguing that the money
should be returned to him because he was the equitable owner
of the funds in the accounts.
the superior court's evidentiary hearing on the son's
claims, but before the court issued its ruling, the son sent
a letter asking the court to consider AS 13.33.201-.227 as
supplemental legal authority. The cited statutes provide
that, in a dispute between joint account owners and creditors
and absent clear and convincing evidence to the contrary, the
funds in a joint account generally belong to the owners in
accordance with their net contributions to the
account. Without mentioning the statutes the son
cited, the superior court subsequently held by a
preponderance of the evidence that the creditor could levy
the joint accounts in their entireties because the financial
institution's account agreement the father and son signed
provided that they each owned the accounts "jointly and
equally ... regardless of their net contributions."
vacate the superior court's decision and remand for
further proceedings because we conclude that: (1) the son did
not waive his argument regarding AS 13.33.21 l's
applicability; (2) the statute applies to determine the
ownership interests of joint account owners in a dispute
involving a third-party creditor; and (3) the correct
standard of proof was not applied and the requisite statutory
findings were not made.
FACTS AND PROCEEDINGS
The Joint Bank Accounts
2013 Desmond Schacht opened joint checking and savings
accounts with his father, Kenneth Schacht, at Alaska USA
Federal Credit Union. Desmond signed Alaska USA's Master
Joint Account Agreement as the "member" on the
accounts, and Kenneth signed as the "joint owner."
Under the Agreement only the "member" was permitted
to "add, remove[, ] or change the status of other joint
owners after compliance with applicable Credit Union
procedures." The Agreement did not otherwise provide
that the member and joint owner would have different rights
with respect to the accounts. Regarding account ownership,
the Agreement provided:
[T]he member and other joint owners agree that all sums now
paid on any account, or which may be paid in on such accounts
in the future, by any or all of the joint owners to their
credit as such joint owners, together with all earnings and
other additions, are and shall be owned by them jointly
and equally with right of survivorship regardless of
their net contributions. . . . All accounts covered by this
agreement shall be subject to withdrawal or receipt by
any of the joint owners, regardless of their net
contributions, and payment to any of them... shall be valid
and shall discharge the Credit Union from any further
liability for such payment. (Emphases added.)
August 2016 Desmond was injured in a car accident when
another driver crossed into his lane. He settled his claim
against the other driver, and in April 2017 he received a
$126, 000 settlement check. He deposited the money in his
joint savings account that same month. Immediately before the
deposit, the joint savings account's balance was $0 and
the joint checking account's balance was $18.27.
Creditor's Lawsuit Against Kenneth
Kunimune and Kenneth met in September 2011 in California to
discuss a possible joint business venture in Alaska.
Apparently, Terry loaned Kenneth $120, 000 in January 2012,
and Kenneth signed a promissory note agreeing to repay Terry
the full loan amount by December 31, 2012.
March 2014 Terry sued Kenneth in California for breach of
contract, requesting the entire principal balance plus
interest, attorney's fees, and costs. Kenneth never
participated in that case. In June 2016 the California court
entered a default judgment in the amount of $ 1 6 1, 5 1 7 -
the amount of principal, pre-judgment interest, and allowable
court costs. Post-judgment interest began accruing at the
rate of 10% yearly.
filed his California judgment in the Anchorage superior court
in May 2017. He then obtained a writ of execution for $179,
463.75 - the amount of the original judgment plus
post-judgment interest and costs. In July 2017 Terry served
the writ on Alaska USA, and Desmond and Kenneth's joint
bank accounts were levied in the amount of $89, 297.13 in
partial satisfaction of Terry's judgment. That same day
Desmond removed Kenneth as a joint account owner.
Desmond's Intervention In The Creditor's
the levy Desmond filed a request for bond and hearing
pursuant to AS 09.35.130. Desmond then filed a third-party claim
and affidavit of ownership stating that he was the "sole
equitable owner" of the funds in the joint bank accounts
that had been levied. The superior court held an evidentiary
hearing over two days in October and November 2017 to
consider Desmond's claims.
testified that he opened joint accounts with Desmond to help
him "manage his accounts]" and so that Kenneth
could easily make deposits to help Desmond with his expenses.
Kenneth believed when they set up the accounts that he would
have to go to a bank branch to transfer money if he were not
a joint owner. Kenneth testified that he never had a debit
card or checks associated with the joint accounts, set up
online access for the accounts, or received monthly account
statements. He claimed he did not consider himself the owner
of the funds in the joint accounts.
testimony was consistent with his father's. Desmond
testified that he opened the joint accounts with the
understanding that they would "provid[e] easy access for
funds to be transferred to [his] accounts]" by his
father "for [his] support." Desmond said his
understanding was that any amounts deposited into his
checking account by his father were "intended for
[him]," and he had "no obligation to pay [the
money] back." Desmond also stated that he did not know
about the judgment against his father or his father's
business dealings with Terry.
close of the evidentiary hearing, the superior court took the
matter under advisement, noting it would research legal
authority relating to a creditor's garnishment of jointly
held property. One week after the hearing, but before the
court had ruled on Desmond's claims, he sent the court a
letter, pursuant to Alaska Civil Rule 77(/),  citing
supplemental authorities for the court to consider regarding
a third-party creditor's rights against a non-debtor
joint owner of a bank account. Desmond cited AS
13.33.201-.227,  probate code sections applying to single-
and multiple-party accounts. This was the first time Desmond
had specifically argued that AS 13.33.201-.227 applied to
this dispute. Terry did not respond to the letter.
superior court issued its findings of fact and conclusions of
law in December 2017. Although it stated that "Desmond
had contributed essentially all of the funds seized from the
two joint accounts as a result of his settlement check,"
the court applied the preponderance of the evidence standard
and held that the Agreement controlled the dispute. Because
the Agreement provided no limitations on Kenneth's
ownership or ability to access funds in the accounts, the
court held that "Terry, as [Kenneth's] creditor,
stands in no worse position with regard to the joint
accounts] and may garnish up to the entire amount of the
funds." The court concluded that Kenneth could not, in
an "attempt to limit Terry's rights as
[Kenneth's] creditor," "claim a lesser interest
in the joint accounts]" than the Agreement provided.
filed a motion under Alaska Civil Rule 52(b) requesting that
the superior court amend its findings. He made "specific
objection[s]" to the findings off act and conclusions of
law that he thought were inconsistent with AS 13.33.211. The
court denied the motion.
also filed a reconsideration motion, arguing that an American
Law Reports article the court cited in its conclusions of law
supported his position that he was the equitable owner of the
funds. The superior court denied Desmond's
reconsideration motion without explanation.
STANDARD OF REVIEW
review de novo questions of law, including the interpretation
of a statute, adopting the rule of law most persuasive in
light of precedent, reason, and policy."
Desmond Preserved His Argument That AS 13.33.211
argues that Desmond forfeited his argument that AS 13.33.211
applies to this dispute by failing to raise it before the
superior court. Terry correctly notes that Desmond referenced
the statute for the first time in a letter citing
supplemental authorities - sent pursuant to Rule 77(/)-after
the evidentiary hearing had concluded. Terry argues that
Desmond's letter was improper, alleging that it was not
sent in connection with a motion as required under Rule
77(/). Terry also contends that the arguments in
Desmond's motion requesting amendment of the superior
court's findings and his motion for reconsideration were
reject Terry's contention that Desmond's letter was
not permitted by Rule 77(/). The rule permits parties to
provide the superior court supplemental legal authority
relating to a previously filed memorandum or to a point made
at oral argument.Desmond's letter provided supplemental
authority relating to both previous memoranda he had filed
and points he had made at the evidentiary hearing. We
therefore must conclude that Desmond has not forfeited his
argument that AS 13.33.211 applies to this dispute.
Forfeiture rules are based on the principle that it is unfair
to the trial court and unjust to the opposing litigant for an
appellate court to rule on a ground that was not presented
below. In this case there is no such unfairness
or injustice. Desmond's Rule 77(/) letter alerted the
superior court to the statute's existence before the
court issued its findings of fact and conclusions of law.
Because Terry was permitted to respond to Desmond's
letter and the superior court was able to consider the
statute before ruling on his claims, he properly raised the
argument before the superior court. This also resolves
Terry's contentions that Desmond's arguments in his
post-judgment motions were untimely.
Alaska Statute 13.33.211 Governs The Ownership Interests Of
Joint Account Owners In A ...