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Markham v. Kodiak Island Borough Board of Equalization

Supreme Court of Alaska

May 24, 2019


          Appeal in File No. S-15853 from the Superior Court Nos. 3KO-13-00471 CI/ 3KO-14-00331 CI of the State of Alaska, Third Judicial District, Kodiak, Pat L. Douglass, Judge. Appeal in File No. S-16663 from the Superior Court of the State of Alaska, Third Judicial District, Kodiak, Steve W. Cole, Judge.

          Gerald W. Markham, Kodiak, Appellant.

          Joseph N. Levesque and Shane E. Levesque, Levesque Law Group, LLC, Anchorage, for Appellee.

          Before: Winfree, Maassen, Stowers, and Carney, Justices.

          Bolger, Chief Justice, not participating.


          CARNEY, JUSTICE.


         In 2013 and 2014 attorney Gerald Markham applied for a senior citizen tax exemption on his residential property in Kodiak. The Borough assessor denied the applications due to Markham's prolonged absences from Alaska. When given the opportunity to prove his absences were allowed under the applicable ordinance, Markham refused to provide corroborating documentation. He appealed the denials to the Borough Board of Equalization, which affirmed the denials. He appealed the Board's decisions to the superior court. The superior court dismissed the 2013 appeal for failure to prosecute, denied the 2014 appeal on the merits, and awarded attorney's fees to the Borough. Markham appeals. We affirm the superior court's 2013 dismissal and the Board's 2014 denial on the merits, but vacate the superior court's award of attorney's fees and remand for further findings.


         A. Kodiak Island Borough's Property Tax Exemption For Senior Citizens

         The Alaska legislature has enacted a mandatory property tax exemption for residents who are older than 65.[1] This exemption provides that "real property owned and occupied as the primary residence and permanent place of abode by a resident who is ... 65 years of age or older ... is exempt from taxation on the first $150, 000 of the assessed value of the real property."[2] The statute allows a municipality to determine eligibility for the exemption by requiring that an individual meet the eligibility requirements of the Permanent Fund Dividend (PFD) program.[3] The Kodiak Island Borough passed an ordinance incorporating the PFD eligibility criteria into its eligibility criteria for the property tax exemption.[4]

         An individual applying for a PFD who is not physically present in Alaska during the qualifying year must prove that the absence was allowed by statute.[5] Alaska Statute 43.23.008(a) lists the allowable absences, including: providing medical care to certain family members "with a critical life-threatening illness" who must travel out of state to receive doctor-recommended treatment;[6] "accompanying another eligible resident who is absent for a reason permitted [by the statute];"[7] and "for any reason consistent with the individual's intent to remain a state resident, provided the absence or cumulative absences do not exceed... 45 days in addition to any absence or cumulative absences" claimed under the statute.[8]

         Gerald Markham has been an attorney since 1972. In 2013 and 2014, Markham - then over the age of 65 - applied for a property tax exemption from the Kodiak Island Borough for a home he owns in the Borough. Markham also owns a home in Anchorage, two homes in Washington - one of which has been Markham's contact address throughout this litigation - and a home in Arizona.

         On his 2013 application Markham noted that the last time he received a PFD was in 2004. On his 2014 application he noted that he did not qualify for the PFD and did not intend to apply for it. The Borough assessor denied the 2013 application because Markham had not provided "persuasive evidence" that, even though he had not applied for a PFD, he still met its eligibility criteria and would therefore qualify for the tax exemption. The denial letter invited him to provide additional documentation if he wished to have the decision reconsidered. In 2014 the assessor again offered him the opportunity to provide additional documentation to prove his eligibility. The 2014 letter did not explicitly deny Markham's application, but reminded him of the need to satisfy the PFD's eligibility requirements. Each letter enclosed a "PFD Eligibility Supplemental Questionnaire" and instructions that if he completed it and satisfied the criteria, the assessor's office would reconsider the denial.

         Markham returned the 2013 supplemental questionnaire, noting he had been absent from Alaska for approximately ten months in 2012: August 2011 through June 2012; August 2012 through December 9, 2012; and December 21, 2012 through "present" (February 25, 2013). He claimed that all three time periods were allowable absences because he "[a]ccompanied an eligible Alaska [r]esident as the resident's spouse," "[v]acationed," "[c]ared for a parent, spouse, sibling, child, or stepchild with a critical life-threatening illness that required the ill individual to leave Alaska for treatment," and left the state for "[o]ther reasons, including business." Markham also included a 12-page letter outlining why he believed he was an Alaska resident, but he did not include any documentation of the reasons for his absences. The assessor again denied his application, and he appealed to the Borough's Board of Equalization.[9]

         Markham asked to attend his appeal hearing before the Board by telephone. The Board denied his request because the Borough Code did not permit it.[10] Markham therefore appointed another Kodiak resident to appear as his representative.[11] After hearing from the representative, considering Markham's written materials, and noting Markham's failure to provide supporting documentation for his absences, the Board affirmed the assessor's denial.

         Markham also returned the 2014 supplemental questionnaire, listing absences totaling approximately 279 days between February and June 2013 and from August 2013 through mid-February 2014. He again claimed his absences were allowable because they were for "continuous medical treatment," "[v]acation[]," "car[ing] for a parent, spouse, sibling, child, or stepchild with critical life-threatening illness that required the ill individual to leave Alaska for treatment," and "[o]ther reasons, including business." He emailed the assessor declining to provide documentation, asserting that it was confidential and he was concerned it would be subject to public disclosure. The assessor again denied the application; Markham again appealed to the Board.

         Markham requested to appear at the Board hearing by telephone and was again denied based on the Borough Code.[12] Markham then sent another representative to appear on his behalf to the hearing. The Board affirmed the assessor's denial.

         B. 2013 Superior Court Proceedings

         In June 2013 Markham appealed the Board's denial of his 2013 application in the Anchorage superior court. His statement of points on appeal claimed that the Board abused its discretion by applying the PFD eligibility criteria to him when he alleged that the Borough failed to adopt procedures for applying the PFD eligibility criteria as required by AS 29.45.030(f);[13] that the Board therefore did not have authority to hear his appeal or require him to satisfy the PFD eligibility criteria; that the Board violated his due process rights; that AS 29.45.030(f) violated his constitutional right to equal protection; and that AS 29.45.030(f) violated his constitutional right to travel.

         The Board moved to change venue, arguing that Kodiak was the proper venue. Markham opposed the motion, but the court granted the motion in November 2013, changing venue to Kodiak.

         On July 11, 2014, the Kodiak superior court gave Markham an August 11 deadline to file his opening brief. Prior to and shortly after the change in venue, Markham filed a series of documents - each opposed by the Board - seeking to supplement the record and opposing the Board's motion for change of venue and motion to stay. Among the documents Markham filed was a "Petition for Reconsideration of February 10 and 18, 2014 Orders In Light of Intervening Alaska Supreme Court Decision." In the conclusion of his petition Markham sought "a stay of this court's briefing order" until he could review the Board's records and move to supplement the record on appeal. The Board opposed the petition, noting that it did not comply with appellate rules, but did not address the request for stay. The superior court denied the petition in late September, but likewise did not address Markham's request for stay.

         The Board moved to dismiss Markham's appeal on October 23. It cited Appellate Rules 612, 503, and 511.5, and pointed out that Markham's brief was more than 60 days delinquent. Markham opposed the motion, claiming that he had requested a stay and that the court's September 29 order denying his petition "[had] not come to his immediate attention" because it was mailed to his Kodiak address, not his Washington address where he was residing and which he had listed with the court as his contact address. The court denied the motion to dismiss, explaining that before the court could dismiss an appeal for failure to comply with the briefing schedule, the court must inform the appellant of the pending dismissal and allow an additional 14 days to file the brief.[14]

         The court gave Markham an additional 14 days from November 17 to file his brief. Markham mailed his brief on December 1. On December 8, 2014, the court dismissed the appeal because it had not received Markham's brief within the allotted 14 days.

         Markham moved for reconsideration, arguing that his brief was timely because Appellate Rule 502(d) recognizes the date of mailing as the date of filing. The Board responded that Markham's brief was due on December 1, and that Appellate Rule 602(j) "unambiguously" required him to file the brief at the Kodiak superior court on or before the due date.[15] Markham replied that he had relied on an" 'older' set of Alaska Court Rules," which predated the amendment of Appellate Rule 602(j). He also argued that he acted reasonably, that there was no prejudice to the Board in accepting his late- filed brief, and that he had shown just cause. The superior court denied the motion to reconsider. The court's order stated that the case was clearly governed by Appellate Rule 602(j) and Markham's brief was therefore untimely. It rejected Markham's argument that the Board had suffered no prejudice, found that there was no justification for his late filing, and found that he "continuously flouted the Rules of Procedure during his appeal." The court then invited the Board to file a proposed bill of costs.

         The Board requested monetary sanctions or attorney's fees totaling $32, 551.65. Markham opposed the motion, arguing that he was a "public interest constitutional litigant." In March 2015 the court awarded the Board $7, 438.93 in attorney's fees and costs.

         Markham appealed the dismissal and attorney's fees and costs award.

         C. 2014 Superior Court Proceedings

         In December 2014 Markham appealed the Board's denial of his 2014 application to the Kodiak superior court. He listed the same grounds as his 2013 appeal, adding that the assessor should have been disqualified due to bias and that the Borough ordinances were void because they exceeded the authority granted by AS 29.45.030. He moved to supplement the record to include the entire record from the 2013 proceedings and an affidavit from his representative at the hearing. The court allowed only a few documents to which the Board did not object.

         The superior court heard oral argument in August 2016 and denied the appeal in February 2017. The court found that the exemption was constitutional both on its face and as applied to Markham and that the Board had not violated his due process rights. In July the court amended its order to clarify the standards of review and make explicit findings of the substantial evidence that supported the Board's decision. The Board requested additional time to file a motion for attorney's fees and costs, but the superior court stayed the issue of attorney's fees and costs pending the resolution of Markham's 2013 appeal.

         Markham appealed.


         "When the superior court is acting as an intermediate appellate court, we independently review the merits of the underlying administrative decision."[16] "A constitutional issue presents a question of law which we review de novo, and to which we apply our independent judgment."[17] In using our independent judgment, "[w]e adopt the rule of law that is most persuasive in light of precedent, reason, and policy."[18] We review a superior court's dismissal of an administrative appeal for failure to prosecute under the abuse of discretion standard.[19] We will find a superior court's decision to dismiss an appeal under Appellate Rule 511.5 was an abuse of discretion if the decision is "arbitrary, capricious, manifestly unreasonable, or . . . stem[s] from an improper motive."[20] "[W]e review de novo whether the superior court correctly applied the law in awarding attorney's fees."[21]


         A. The Superior Court Did Not Abuse Its Discretion By Dismissing The 2013 Appeal.

         Markham suggests that the superior court abused its discretion by dismissing his 2013 appeal because it "had both the duty to advise [him] of his specific error" in filing his brief late and to allow him to correct it because he was a pro se litigant.[22] This argument has no merit. Markham is an attorney who, as the superior court observed, "by his own account has been practicing law for decades in Alaska." His decision to pursue his own case does not entitle him to the leniency we give pro se litigants in their attempts to conform with procedural requirements. Furthermore, despite being given more notice and procedure than the rules require, [23] Markham failed to familiarize himself with relevant court procedures, [24] failed to comply with the court's deadline, failed to file a brief for over a year and a half after filing the notice of appeal, and, as the superior court found, "continuously flouted the Rules of Procedure." The court was well within its discretion to dismiss his 2013 appeal.

         B. There Is No Violation of Markham's Right To Equal Protection.

         Markham does not dispute that he spent significantly more time outside of Alaska in 2013 and 2014 than the PFD program permits to qualify as an eligible PFD recipient. As a result, the Borough assessor determined that he also did not qualify for the tax exemption pursuant to former Kodiak Island Borough Code (KIBC) 3.3 5.080(D). He argues, however, that the eligibility requirements incorporated into former KIBC 3.35.080(D) are unconstitutional because they violate his right to equal protection. He claims that because he owns his home, does not rent it out, and is a resident for other purposes such as voting and obtaining a driver's license, [25] he should be eligible for the tax exemption. This argument mirrors those we have already addressed in the PFD context, [26] which is not surprising because the Borough based eligibility for the tax exemption on the same criteria as the PFD.[27]

         Like the PFD, the tax exemption is an economic benefit conferred by the State.[28] We have previously held that restricting the PFD to bona fide residents does not violate an individual's right to equal protection.[29] We held that strict residency and physical presence requirements furthered a legitimate state interest because the PFD is a portable cash benefit and is "particularly susceptible to passers-through establishing minimal ties to Alaska while intending to reside elsewhere."[30] The tax exemption is similarly portable: it provides a cash benefit for those individuals who receive it. It therefore follows that although the precise economic benefit conferred here is different - a tax exemption rather than a PFD - the analysis is the same.

         Markham appears to base his equal protection argument on a comparison between a class of senior citizens who do not remain in Alaska for 185 days each year due to their travel and senior citizens who do remain in Alaska for 185 days each year. But the appropriate classes that we must consider are: individuals 65 years of age or older who own and occupy a primary residence and permanent place of abode in Kodiak and meet the eligibility requirements as strictly defined by the PFD statutes; and individuals 65 years of age or older who own and ...

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