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Handley v. Dept. of Revenue (9/18/92), 838 P 2d 1231
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Notice: This is subject to formal correction
before publication in the Pacific Reporter.
Readers are requested to bring typographical
or other formal errors to the attention of
the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, in order
that corrections may be made prior to
permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
JOSEPH E. HANDLEY, )
) Supreme Court No. S-4189
Appellant, ) Superior Court No.
) 3KN-89-861 Civil
v. )
)
STATE OF ALASKA, DEPARTMENT ) O P I N I O N
OF REVENUE, )
)
Appellee. ) [No. 3885 - September 18, 1992]
)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Kenai,
Charles K. Cranston, Judge.
Appearances: Joseph E. Handley, Seward,
pro se. Teresa Williams, Assistant Attorney
General, Anchorage, and Charles E. Cole,
Attorney General, Juneau, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
COMPTON, Justice.
RABINOWITZ, Chief Justice, with whom
MATTHEWS, J., joins, dissenting in part and
concurring with the result.
I. FACTUAL AND PROCEDURAL BACKGROUND
Joseph Handley is currently at the Spring Creek
Correctional Center in Seward, serving a 45 year
sentence imposed in 1978. Pursuant to 22 Alaska
Administrative Code (AAC) 05.251 (1991), he was
transferred to the Federal Bureau of Prisons (FBP) and
was "housed" at the Fort Leavenworth Federal Prison
(1978-1984), El Reno Federal Prison (1984-1986), and
the Oxford Federal Prison (1986-1988), until he was
transferred to Spring Creek Correctional Center in
Alaska in October 1988.
The Department of Revenue, Permanent Fund Division,
(DOR) sent Handley's permanent fund dividend
application to his correctional facility starting in
1982. Each year Handley completed the form in the same
manner and mailed it to DOR. From 1982 to 1986 DOR
approved the application.
In 1987 DOR rejected Handley's application. DOR cited
Handley's failure to include the signatures of the
residency verifiers on his application.1 On his
original 1987 application, Handley printed the name
"Harry Davis D.A." and signed in cursive the name
"Judge Warren Taylor"2 in the boxes requesting the
signature of "Spouse, Relative or Friend." Under each
of these, in boxes requesting the printed name of the
person "Who Signed Above,"Handley wrote "Fbx." He did
not fill in the boxes requesting date, mailing address,
city, state and zip code, and daytime telephone number.
DOR wrote Handley and requested additional information
about his absences between October 1986 and March 1987.
Handley replied that he was absent from April 13, 1978
until 1988 when the new prison opened in Alaska.
Handley's 1987 permanent fund dividend was denied.
Handley filed a request for an informal appeal. His
dividend denial was then amended to include the basis
that he did not have the required intent to return to
Alaska. DOR based this finding on the records from
Handley's hearings before the Alaska Department of
Corrections Classification Review Board. At these
hearings, Handley had stated that he did not wish to
return to Alaska and wanted to be paroled elsewhere.3
Replying to another DOR request for additional
information, Handley submitted an amended application,
back dated to the day after he signed his original
application. This application was verified by two
correctional counselors from the Federal Correctional
Institution in Oxford, Wisconsin.4 At an informal
conference, DOR affirmed the denial on the alternative
ground.
Handley then requested a formal hearing. When the
hearing was conducted, Handley, who had since been
transferred to the Seward facility, participated by
phone. During the hearing Handley was assisted by a
corrections counselor. At the hearing the Revenue
Hearing Examiner reinstated improper verification as a
ground for rejection of the application. He held that
Handley's revised application should not have been
accepted because the first application was submitted
with false residency verifications designed to deceive
DOR. The hearing examiner based his determination that
the proffered verifiers' signatures were intended to be
deceptive partly because they were in different
handwriting, one having been printed and one written in
cursive. The evidence was uncontradicted that both
signatures were false and unauthorized. He construed
AS 43.23.015 to mean that "the Applicant's signing of a
PFD application constitutes a claim of eligibility
predicated on the facts contained in the application."
Again, Handley's appeal was denied on both grounds.
Handley appealed to the superior court. AS
22.10.020(d); Alaska R. App. P. 602(a)(2) (1991-92).
The superior court affirmed DOR's decision.
II. DISCUSSION
A. STANDARD OF REVIEW.
We will independently review the merits of an
administrative determination. No deference is given to
the superior court's decision when that court acts as
an intermediate court of appeal. Tesoro Alaska
Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903
(Alaska 1987).
We have recognized four principal standards of review
of administrative decisions. The "substantial
evidence" test is used for questions of fact. The
"reasonable basis"test is used for questions of law
involving agency expertise. The "substitution of
judgment" test is used for questions of law where no
expertise is involved. The "reasonable and not
arbitrary" test is used for review of administrative
regulations. Jager v. State, 537 P.2d 1100, 1107 n.23
(Alaska 1975).
In this case, the substantial evidence test applies.
Substantial evidence is "such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion." Keiner v. City of Anchorage, 378 P.2d
406, 411 (Alaska 1963). We need only determine whether
such evidence exists, and do not choose between
competing inferences. Interior Paint Co. v. Rodgers,
552 P.2d 164, 170 (Alaska 1974). We do not evaluate
the strength of the evidence, but merely note its
presence. Matanuska-Susitna Borough v. Hammond, 726
P.2d 166, 179 n.26 (Alaska 1986).
Also applicable is the reasonable and not arbitrary
test. This standard is not demanding: "[W]here an
agency interprets its own regulation . . . a
deferential standard of review properly recognizes that
the agency is best able to discern its intent in
promulgating the regulation at issue." Rose v.
Commercial Fisheries Entry Comm'n, 647 P.2d 154, 161
(Alaska 1982).
B. HANDLEY WAS PROPERLY DENIED HIS
1987 PERMANENT FUND DIVIDEND.
DOR denied Handley's 1987 permanent fund dividend on
two grounds: 1) Handley did not have valid signatures
of two residency verifiers; and 2) Handley did not
prove that at all times during his absence he
maintained the intent to permanently reside in Alaska.
The permanent fund dividend regulations require that
"[a]n applicant must indicate on the prescribed form
information required by the department which will
support the claim of residency." 15 AAC 23.675(a)
(1988). The application required the signatures of two
residency verifiers.5 Handley did not supply authentic
signatures or even the names of authentic residency
verifiers. The regulations allow for the submission of
additional information if the application is
"insufficient." 15 AAC 23.625(c) (1988). The
applicant then has 60 days from being notified of its
insufficiency to supply corrected information. 15 AAC
23.625(f) (1988).
However, DOR held that an extension was not available
whenever the information submitted in the original
application was deceptive. DOR found that Handley's
application was intentionally deceptive and thus
rejected it without considering his corrected
submission.
We conclude that this ruling is reasonable and not
arbitrary. Under these circumstances, the information
"included on or provided with the application"was not
merely "insufficient"; it was false information
provided with the intention that DOR be deceived. The
determination that Handley was trying to deceive DOR is
supported by the record.6 Relevant evidence as a
reasonable mind might accept, namely the presence of
the signatures, one printed and one written in cursive,
exists to support the Revenue Hearing Examiner's and
DOR's conclusions.
Because we conclude that the first basis for rejection
of Handley's application is supported in fact and in
law, we need not analyze whether the alleged absence of
intent to reside permanently in Alaska is also
supportable. Further, a holding on the second ground
would have no precedential value, because incarcerated
felons are no longer eligible for the permanent fund
dividend. AS 43.23.005(d) (amended in 1988).
C. DOR DID NOT BREACH ITS DUTY TO ASSIST
AND INFORM HANDLEY.
Handley argues that DOR breached its duty to assist
residents of the state who need help establishing
eligibility.7 Handley claims that DOR breached this
duty by not advising him of regulation amendments which
affected his status.
Handley does not point to any evidence that "language,
disability, or inaccessibility to public
transportation"affected his ability to establish his
eligibility for a permanent fund dividend, or to submit
an application for a permanent fund dividend.8 He does
not point to any evidence that he ever requested and
was denied the assistance of the DOR in establishing
his eligibility or submitting his application for a
permanent fund dividend. We conclude that this claim
of error has no merit.
D. CONSTITUTIONAL OBJECTIONS.
Handley states two constitutional objections to the
permanent fund dividend scheme. First, Handley
contends that 15 AAC 23.190(a)(1991), which requires
submission of "other information,"is so vague that it
violates due process. Second, he contends that the
definition of "state resident"in AS 43.23.095(8) is
overbroad and violates equal protection. In view of
our affirmance on the ground that the forged signatures
on false verifications of Handley's original 1987
application were made with the intent to deceive DOR,
we need not address Handley's constitutional arguments.
Handley's first objection is not relevant because
"other information" need not be requested when
intentional deception is found. Handley's second
objection need not be addressed because it pertains
only to intent to reside in Alaska, the DOR's
alternative ground for rejection.
III. CONCLUSION
The denial of Handley's 1987 permanent fund dividend
was based on a determination that he submitted false
residency verifications containing forged signatures
intended to deceive DOR. DOR's determination that
Handley was trying to deceive DOR is supported by
substantial evidence. DOR acted legally and
permissibly in denying Handley an opportunity to
correct his application.
The superior court's decision is AFFIRMED.
RABINOWITZ, Chief Justice, with whom MATTHEWS, J.,
joins, dissenting in part and concurring with the
result.
I dissent from the court's affirmance of the DOR's
ruling that Handley's application was intentionally
deceptive and therefore was appropriately rejected.
More particularly, my review of the record persuades me
that there is an absence of substantial evidence to
support the majority's conclusion that the information
contained in Handley's application was "false
information provided with the intention that DOR be
deceived."
As the majority correctly notes in regard to Handley's
original application he ". . . printed the name `Harry
Davis D.A.' and signed in cursive the name `Judge
Warren Taylor' in the boxes requesting the signature of
`Spouse, Relative or Friend.' Under each of these, in
boxes requesting the printed name of the person `Who
Signed Above,' Handley wrote `Fbx'."9 In my opinion
the following features of the questioned application
information are significant. Although the signatures
are in different handwriting from each other, they are
not in different handwriting from the remainder of the
application. Both were obviously written by Handley.
The printed name matches the printing on the
application and the cursive name matches Handley's own
verifying signature. Moreover, the listing of the
address as "Fbx" cannot be considered substantial
evidence of intentional deception.
In addition to the above, I think Handley's
explanations carry the day. At one point in the record
Handley writes:
I realize that ignorance of the law is
not a valid excuse for anything. But, I
honestly didn't believe that I was doing
wrong, by putting the Judge's and the
District Attorneys names on the application.
Specially after I had did it so many times &
no problems. For who would better know that
I am a resident of Alaska & will be for many
years.
(Emphasis provided.)10
For the reasons stated above, I conclude that DOR's
rejection of Handley's 1987 permanent fund dividend
application cannot be sustained on the basis that the
information submitted in the original application was
deceptive.11
_______________________________
1. The 1987 Permanent Fund Dividend Application reads:
RESIDENCY VERIFICATION IS
REQUIRED BY TWO ADULTS WHO KNOW YOU
The statement below must be read and
signed by two adults who know you, and who
can confirm that you are eligible for a
permanent fund dividend. . . . Persons you
may wish to ask to verify your residency
include your spouse, other relatives, close
friends or neighbors. It is preferable that
these persons be Alaska residents who are
also applying for their permanent fund
dividends.
(Emphasis in original). The application then requests the
signature, address and telephone number of the
verifiers.
2. Harry Davis was the Fairbanks district attorney who
prosecuted Handley. Judge Warren Taylor was the judge
who presided
over Handley's criminal case and sentenced him. Handley claimed
he included the names of Davis and Taylor because they
could attest that he was in the Alaska Prison System, a
matter not in issue. He used their names as
"references," but did not indicate that on his
application.
3. Handley is not even eligible for parole until 1997.
Incarcerated in 1977, he has a full term projected
release date of October 13, 2007. A letter from Robert
P. Spinde, Chief Classification Officer, Department of
Corrections, to Tracy Buchheim, PFD Specialist 1,
Permanent Fund Dividend Division, discloses the
following information taken from log notes of hearings:
August 1979 Wants to complete his time in the
federal prison.
June 1980 Does not want to return to Alaska.
Desires parole to state of Wyoming.
1981 No classification hearing was held for
Mr. Handley this year, he was back in
Alaska for legal proceedings.
March 1982 No desire to return to Alaska. Complete
his time FBP.
May 1983 Does not want to return to Alaska while
serving his sentence.
April 1984 Wishes to remain in FBP until after the
max unit is in operation for a few years.
1985 Does not want to return to Alaska.
1986 The written record regarding this
hearing cannot be located.
May 1987 Mr. Handley waived this hearing.
May 1988 Wishes to return to Alaska. Will be
requesting return to Alaska when bedspace
is available. (Mr. Handley was returned
to Alaska on 10/18/88, and remains to the
present time.)
4. Handley was housed at Oxford when he submitted his
original 1987 application, but did not originally seek
to use local officers as his residency verifiers.
5. See supra note 1.
6. This court will not reweigh conflicting evidence or
substitute its judgment for that of the individual
charged with reviewing the applications. See Childs v.
Kalgin Island Lodge, 779 P.2d 310, 315 (Alaska 1989).
The evidence should be viewed from the perspective of
that individual.
7. "The department shall . . . assist residents of the
state, particularly in rural areas, who because of
language, disability, or inaccessibility to public
transportation need assistance to establish eligibility
and to apply for permanent fund dividends." AS
43.23.055 (4).
8. Handley contends that he is "disabled"for purposes of
AS 43.23.055(4) because as an inmate he does not have
the "capacity for the full enjoyment of ordinary legal
rights." We reject the idea that all inmates are
"disabled"for the purposes of section 55. Rather, an
applicant must have a physical or mental disability
which hinders the application process in order to
qualify for assistance.
9. The record is uncontradicted that from 1982 to 1986 DOR
approved Handley's permanent fund dividend applications
all of which were completed in the same manner as the
now questioned 1987 application.
10. This theme is reiterated throughout the record. For
instance, at another point in the record Handley
states: "I honestly thought that I was filling out the
forms correctly. For who would better know that I am
in prison and have been since September 17, 1977, than
the judge who had sentenced me, and the District
Attorney who had prosecuted me?"
11. I am of the view that rejection of Handley's
application is supportable on the basis that Handley
lacked the intent to reside in Alaska throughout the
period in question.
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