Varilek v. Burke

This pro se appeal arises for the 2008 valuation of a parcel of property by the personal representative of the estate that owns the property. The initial valuation was $146,200. It was reduced to 112,100 by the Senior Municipal Appraiser who determined that the building was 50% incomplete. Varilek claimed that the home was 75% incomplete and the valuation should be reduced by another $35,000. He appealed to the Board of Equalization for a hearing on valuation.

At the hearing, his evidence was reviewed and discussed, but the valuation was not changed. Varilik appealed to the superior court which affirmed the Board. The Supreme Court points out that AS 29.45.210(b) gives one appealing an assessment valuation the burden of proof that the valuation is improper. It agrees with the superior court that Varilek did not meet this burden and affirms it decision upholding the Board’s valuation.

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Cowan v. Yeisley

The Cowans were deeded a portion of a larger tract of land in Ketchikan including a thirty foot “right of way” for access to it. Other portions of the tract were later deeded out which did not mention the right of way or attempt to convey the portion of the tract upon which it was located. All of the tract except the Cowans’ portion was later subjected to two plat which dedicated the right of way to the Borough which approved the plats. The Cowans did not sign the plats.

In 2006 the Cowans filed suit against the Yeisleys, other owners of property in the tract, and the Borough seeking ownership of the thirty foot strip either as part of the original conveyance to them or by adverse possession. The trial court ruled that the original deed did not convey a fee interest in the property and that they did not meet the requirements of the 2003 legislative amendments to the adverse possession statute, AS 09.45.052, requiring color of title or a “good faith but mistaken belief” that the disputed land was within the boundaries of their property.

The Cowans appealed arguing that the original deed must have intended them to be the owners of the right of way since the grantor never deeded the disputed portion to anyone else and it would be illogical that he intended to keep it for himself after deeding away the rest of the tract. The Court pointed out that the general rule is that the term “right of way” is synonymous with “easement.” Therefore, the deed is unambiguous and there is no need to seek to determine intent.

The Cowans also argued that it was error to apply the 2003 version of AS 09.10.030 to their adverse possession claim because the Cowans were vested with title to the disputed land before the statute was changed, the legislative history indicates that the changes were not intended to be applied to vested adverse possession rights, and the Legislature did not indicate that the law changing AS 09,10.030 was retrospective.

The Court points out that AS 01.10.090 states that “[n]o statute is retrospective unless expressly declared therein.” The 2003 amendments to AS 09.10.030 specifically stated that the amended version “applie[d] to actions that have not been barred before [July 18, 2003] by AS 09.10.030 as it read before [July 18, 2003]. Its application here would be retrospective since it would prevent a claim for adverse possession that could have been ripe prior to the time of the statute. The Cowans claimed they had adversely possessed the disputed land for more than ten years before 1980. Since title automatically vests in the adverse possessor at the end of the statutory period, the Cowans would be deprived of a valid claim, if they proved their case.

Since the factual disputes regarding the elements of adverse possession had not been determined, the case was remanded for further factual findings, particularly on the hostility element. The trial court’s finding that the disputed land was validly dedicated to the Borough was vacated. If the Cowans are found to be owners at the time the plats were approved, their signatures would be required while the signatures of easement holders are not required.

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Roberson v. Southwood Manor Associates, LLC

This case presents the issue of whether Alaska’s Unfair Trade Practices and Consumer Protection Act (UTPA) applies to residential leases. Southwood Manor Associates, LLC (Southwood) filed a complaint against tenant Diane Roberson seeking eviction, back rent, late charges, and other damages. Roberson filed an answer and class action counterclaims alleging in part that the late charges violated the UTPA. The trial court held that the UTPA does not apply to residential leases. The Supreme Court granted Roberson’s petition for review.

The Supreme Court first reviewed its past cases where it held that the UTPA did not apply to real estate transactions involving mortgages and the sale of standing timber. Some legislative history was reviewed including the legislature’s adding some mortgage practices within the UTPA following the Supreme Court’s holding that the UTPA did not apply to Mortgages. It also pointed out that the legislature’s adoption of the Uniform Residential Landlord and Tenant Act was consistent with the conclusion that the UTPA did not apply to residential leases. It affirmed the decision that the UTPA does not apply to residential leases.

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Horan v. Kenai Peninsula Borough Board of Equalization

This case of limited application deals with the property tax valuation of property participating in the low-income housing tax credit (LIHTC) as part of the Tax Reform Act of 1986. In it a developer can receive federal income tax credits by committing to rent to low income households at restricted rental rates. This raises issues of how the tax credits and restricted rents affect property tax assessment. Other states are briefly surveyed but have little consistency in the resolution of these issues.

Although AS 29.45.110(d) provides that the assessment is based on the actual income from the property without adjustment based on the amount of any federal income tax credit ($383,833 here), local governments can determine by ordinance whether to determine on a parcel by parcel basis whether to use the mandatory income approach. In 2005, 2006, and 2007 the Assessor valued the apartments owned by Pacific Park Limited Partnership (Pacific Park) at $2,930,700 using the cost approach. In 2007, Pacific Park had the apartments independently appraised using the income approach and the restricted rents resulting in a value of $652,000.

Pacific Park appealed the Assessor’s valuation to the Borough’s Board of Equalization (Board). The Board approved the use of the cost method, but based on the rent restrictions or economic obsolescence reduced the apartment’s improvement value by 40%. The Assessor appealed the Board’s decision to the superior court and Pacific Park cross-appealed. The superior court addressed four issues. First, the Board did not err by not adopting the income approach to value the apartments. Second, the Board did not violate state law, borough code, or legislative intent by adjusting the Assessor’s valuation. Third, the Board did not err by finding the Assessor’s application of the cost approach resulted in an overvalued and grossly disproportionate valuation. Finally, the facts and law supported the Board’s valuation , including the 40% reduction.

The Supreme Court affirmed the use of the income approach holding that a taxing authority is allowed to choose a reasonable method for determining the value of a property “so long as there was no fraud or clear adoption of a fundamentally wrong principle of valuation.” It further affirmed the superior court’s approval of the Board’s consideration of the rental restrictions when valuing the apartments under the cost approach. However, it found the record not clear on why 40% was chosen for the reduction or the basis for finding that the valuation was grossly disproportionate to similar properties and remanded for further proceedings on those issues.

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Chambers v. Scofield

Reggie Chambers purchased a triplex from Curtis Carley in 2006. In 2007 Dana Scofield was appointed Carley’s guardian due to his mental condition. Scofield subsequently sued Chambers alleging that Chambers had fraudulently induced Carley to sell the triplex for less than fair market value. The parties entered into a settlement agreement to rescind the sale and restore the parties to the position they would have been in had the sale not occurred. Adjustments were made for the down payment, rents, management, and utilities, taxes and insurance actually paid.

Additionally, Chambers was to be reimbursed for the “fair market cost” of repairs and improvements he made to the triplex. This ill chosen and undefined term became the cause of the litigation. The first appraisal by Keith Halsey, gave Chambers a credit of $25,525 for work performed on the triplex. This was a reduced amount due to poor workmanship, lack of permits, and similar deficiencies. The inclusion of value in addition to cost and the lack of clear instructions led the Superior Court to reject the appraisal.

The parties met off-record to draft rules for a new inspection byWilliam Roberts which would be attended by Judge Christen. Roberts determined the “fair market cost” to be $86,692.29 less $14,016.99 for work done to less-than-workmanlike standards. Judge Christen accepted the $86,692.29 but only reduced it by $5,693.73 for deficient work. No award was made for the profit and overhead normally part of a construction contract. She further declined to award attorneys fees and costs to either parties finding neither was fairly deemed the prevailing party in the case.

The Supreme Court (Christen not participating) affirmed the Superior Court. It pointed out there is little legal precedent defining the term “fair market cost” and no industry standard clearly indicating it includes profit and overhead. As such it would not be interpreted as part of the settlement agreement. It also pointed out that Chambers could have made it an explicit part of the agreement had he intended to be compensated for it. It further stated that it was within the trial court’s discretion to deny attorney’s fees and costs altogether so long as its reasons for doing so are clear in the record.

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