Gillis v. Aleutians East Borough

The sole issue of this case is the application of a preference right for the purchase of state land under the Alaska Land Act as amended by the legislature in 1984. The pertinent provision as codified in AS 38.05.035(f) provides in relevant part:

The director shall grant a preference right to the purchase or lease without competitive bid of up to five acres of state land to an individual who has erected a building on the land and used the land for bona fide business purposes for five or more years under a federal permit or without the need for a permit and, after selection by the state, under a state use permit or lease, if the business produced no less than 25 percent of the total income of the applicant for the five years preceding the application to purchase or lease the land.

Melvin Gillis, a professional sport hunting and fishing guide, obtained a 25-year lease of five acres of state land in April 1989. Gillis built a lodge on the land, and the operation of the lodge and his guiding business provided his principal source of income. In 2005 the Department of Natural Resources transferred the subject land and lease to the Aleutians East Borough. Later that year Gillis offered to purchase the land. The Borough rejected his offer but proposed a new lease agreement. Gillis did not execute the lease, and in 2007 claimed he was eligible to purchase the land under the above cited statute. The Borough maintained Gillis did not qualify for a preference right because his lease commenced after the federal government transferred the land to the state. In 2008 Gillis reiterated his preference-right claim.

The Borough then filed a declaratory judgment action. Gillis counterclaimed against the Borough, filed a third-party complaint against DNR, and moved for partial summary judgment against both parties. The Borough and DNR cross-moved for summary judgment. At issue was whether subsection .035(f) required an applicant to enter land while it was under federal ownership as a condition of the preference right. The court entered summary judgment in favor of the Borough and DNR.

The Supreme Court first determines that the plain language of the statute requires the applicant to have entered the land while it was under federal ownership to qualify for the preference. The critical language is: “erected a building on the land and used the land . . . under a federal permit or without the need for a permit and, after selection by the state, under a state use permit or lease.” The argument by Gillis that interpreting the statute in pari materia with the Alaska Land Act’s other preference-right provisions requires granting a preference is rejected. As are arguments based on legislative history and intent, DNR’s Regulations and Decisions, and absurd results. The superior court’s interpretation of the statute and its summary judgment decision are affirmed.

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