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North Star Terminal and Stevedore v. Alaska Railroad Corp. (7/30/93), 857 P 2d 335
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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
NORTH STAR TERMINAL AND )
STEVEDORE COMPANY, INC., an ) Supreme Court No. S-4770
Alaska Corporation, )
) Trial Court No.
Appellant, )3AN-88-12350 Civil
)
v. )
)
STATE OF ALASKA and THE ) O P I N I O N
ALASKA RAILROAD CORPORATION, )
a statutory public )
corporation, )
)
Appellees. ) [No. 3986 - July 30, 1993]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
J. Justin Ripley,
Judge.
Appearances: Thomas E. Meacham, Burr,
Pease & Kurtz, Anchorage, for Appellant.
Elizabeth J. Barry, Assistant Attorney
General, Anchorage, Charles E. Cole, Attorney
General, Juneau, for Appellee State of
Alaska. Phyllis C. Johnson, Office of the
General Counsel for Alaska Railroad
Corporation, Anchorage, for Appellee Alaska
Railroad Corporation.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
MATTHEWS, Justice.
I. INTRODUCTION
This appeal concerns the ownership of tidelands at the
Port of Anchorage. North Star Terminal and Stevedore Company,
Inc., (North Star) sued the State and the Alaska Railroad
Corporation to quiet title in favor of North Star. The trial
court ruled that North Star possessed no ownership interest in
the disputed tidelands. North Star appeals.
II. FACTS
The tidelands which are the subject of this appeal were
previously subject to a quiet title action. United States v.
City of Anchorage, 437 F.2d 1081 (9th Cir. 1971). The tidelands
were originally owned by the United States. Id. at 1082.
However, upon its admission to the Union in 1959, the State of
Alaska claimed the tidelands under the Submerged Lands Act of
1953, 43 U.S.C. 1301-1356, and sections 6(k) and (m) of the
Alaska Statehood Act, 48 U.S.C. note prec. 21. Id. at 1083.
In 1961 the State purported to convey the tidelands to the City
of Anchorage via State Tidelands Patent No. 10. Id. In 1965 the
City purported to convey the tidelands via quitclaim deeds to
various tideland occupants, including North Star's predecessor in
interest, Cook Inlet Tug & Barge Co. (Cook Inlet). At that time,
the United States sued to quiet title to the tidelands, claiming
that no transfer of ownership to the State had taken place. Id.
The District Court ruled against the United States. The Ninth
Circuit reversed, holding that the United States had by
implication reserved the tidelands for use by the federally owned
Alaska Railroad in 1915 and that title to the lands remained in
the United States after the admission of Alaska into the Union.
The Ninth Circuit remanded to the District Court to determine the
exact boundaries of the tidelands and to quiet title to them in
favor of the United States. Id. at 1085.
Rather than have the District Court determine the
location of the boundaries, on remand the parties entered into a
settlement agreement which the District Court incorporated in its
final judgment. Although not a party to the lawsuit, North Star
signed the settlement agreement as successor in interest to Cook
Inlet. In the agreement, North Star explicitly acknowledged that
the Alaska Railroad owned the tidelands at issue in fee simple.
In addition, the District Court's final judgment explicitly
nullified the City of Anchorage's quitclaim deed to Cook Inlet:
"all deeds, leases and other instruments of title heretofore
issued by the City of Anchorage for [the tidelands] are declared
to be of no effect, and completely null and void."
In 1983 Congress authorized the transfer of the land
and other assets of the Alaska Railroad to the State or a State-
designated entity. The State created the Alaska Railroad
Corporation to receive the railroad's assets and operate the
railroad. Pursuant to these acts the tidelands were conveyed by
the United States to the Alaska Railroad Corporation in 1985.
North Star then brought the present suit to quiet title. All
parties moved for summary judgment. The trial court granted
summary judgment in favor of the State and the Alaska Railroad
Corporation. North Star appeals.
III. DISCUSSION
Essentially, North Star presents three independent
arguments.1 It argues that it owns the tidelands; that even if
the Alaska Railroad Corporation would otherwise own the
tidelands, the doctrine of estoppel by deed requires the Alaska
Railroad Corporation to transfer ownership to North Star; and
that AS 38.05.820 provides it with property rights to the
tidelands.
A. North Star's ownership claim is barred by res judicata.
North Star's ownership claim is based on the premise
that Alaska acquired ownership of the tidelands at Statehood.2
This assertion is contrary to the holding in City of Anchorage.
The Ninth Circuit specifically held that title to the tidelands
did not pass to Alaska upon its admission to the Union. City of
Anchorage, 437 F.2d at 1085. On remand, pursuant to the
agreement of the parties, the District Court's final judgment
specifically provided that the United States owned the tidelands
in fee simple. The effect of this final judgment is that no
other entity had any interest in the tidelands. Black's Law
Dictionary 615 (6th ed. 1990) ("A fee simple . . . is an estate
. . . without limitation or condition.").
The doctrine of res judicata precludes North Star from
relitigating this issue. The Restatement (Second) of Judgments
provides, in relevant part: "A judgment [between parties in a
former adjudication] . . . is conclusive in a subsequent action
between [the parties] on the same or a different claim, with
respect to any issue actually litigated and determined if its
determination was essential to that judgment." Restatement
(Second) of Judgments 17 (1982). Although neither North Star
nor the Alaska Railroad were parties to City of Anchorage, they
are both successors in interest to parties involved in City of
Anchorage. Thus, section 17 applies to them. Restatement
(Second) of Judgments 43 (1982) ("A judgment in an action that
determines interests in real . . . property . . . [h]as
preclusive effects upon a person who succeeds to the interest of
a party to the same extent as upon the party himself."); see also
id. 43 reporter's note at cmt. a ("When the matter adjudicated
concerns title to property . . . there is no question that the
determination defines a property interest and is carried over
upon succession.").
North Star argues that res judicata nonetheless does
not apply to the present case for two independent reasons.
First, it claims that the issue in the present case is different
than the issue in City of Anchorage. Second, it claims that a
recent United States Supreme Court decision, Utah Division of
State Lands v. United States, 482 U.S. 193 (1987), changed the
controlling law and warrants a new determination of its claim to
the tidelands. Both arguments lack merit.
North Star maintains that the issue involved in the
present case is "what sovereign rights and equities the State had
in fact acquired in these tidelands at statehood." It argues
that the scope of these rights and whether these rights were
subsequently conveyed to others was "simply not litigated" in
City of Anchorage.
We disagree. The Ninth Circuit ruled that title to the
tidelands did not pass "to Alaska upon its admission to the
Union." City of Anchorage, 437 F.2d at 1085. It remanded the
case to the District Court with instructions to enter "judgment
quieting title in the United States to the tidelands." Id. On
remand, the District Court incorporated the settlement agreement
and expressly ruled that the United States owned the tidelands at
issue in this case in fee simple.3 The court did not reserve any
interest in North Star's predecessor. Instead, it declared the
instruments purporting to transfer any interest to North Star's
predecessor "completely null and void." Thus, the effect of the
District Court's ruling is that the State neither acquired nor
transferred any rights in the tidelands. See also Nevada v.
United States, 463 U.S. 110, 129-30 (1983) ("a final judgment
. . . 'is a finality . . . not only as to every matter which was
offered and received to sustain or defeat the claim or demand,
but as to any other admissable matter which might have been
offered for that purpose.'"(quoting Cromwell v. County of Sac,
94 U.S. 351, 352 (1877)).
As for its second argument, North Star relies on
section 28(2)(b) of the Restatement (Second) of Judgments.
Section 28(2)(b) recognizes an exception to res judicata when the
issue to be relitigated "is one of law and . . . a new
determination is warranted in order to take account of an
intervening change in the applicable legal context or otherwise
to avoid inequitable administration of the laws." Restatement
(Second) of Judgments 28(2)(b) (1982).
North Star claims that Utah Division of State Lands has
changed the controlling law, and cites to four cases in support
of its claim that section 28(2)(b) permits relitigation of past
determinations under such circumstances: Staten Island Rapid
Transit Operating Authority v. Interstate Commerce Commission,
718 F.2d. 533 (2d Cir. 1983); Cole v. Greyhound Lines, Inc., 716
P.2d 611 (Mont. 1986); Hodes v. Axelrod, 515 N.E.2d 612 (N.Y.
1987); John P. v. Whalen, 429 N.E.2d 117 (N.Y. 1981). None of
these cases support North Star's thesis.4
In addition, we question whether Utah Division of State
Lands changed controlling law. The law applied in Utah Division
of State Lands is summarized in the following passage:
In Shively[ v. Baubee, 152 U.S. at 49-
50, 14 S. Ct. at 566-567] and [United States
v. ]Holt State Bank, [270 U.S. at 55, 46 S.
Ct. at 199] this Court observed that Congress
"early adopted and constantly has adhered"to
a policy of holding land under navigable
waters "for the ultimate benefit of future
States." Congress, therefore, will defeat a
future State's entitlement to land under
navigable waters only "in exceptional
instances," and in light of this policy,
whether faced with a reservation or a
conveyance, we simply cannot infer that
Congress intended to defeat a future State's
title to land under navigable waters "unless
the intention was definitely declared or
otherwise made very plain."
Utah Division of State Lands, 482 U.S. at 201-02 (citations
omitted). The Supreme Court of the United States did not
overrule any of its prior cases in deciding Utah Division of
State Lands. The Ninth Circuit in City of Anchorage relied on
Holt State Bank and Shively, among other decisions. It concluded
that the intention of Congress to reserve the tidelands was
"obvious," 437 F.2d at 1084, that "establishment of the Alaska
Railroad was one of those 'exceptional instances' falling within
the exception to the general rule stated in"Holt State Bank and
Shively, City of Anchorage at 1085, and that "[b]eyond question,
the establishment of the railroad was a 'public exigency', as
that phrase was used in those cases." Id. Thus in deciding City
of Anchorage the Ninth Circuit employed the same legal standards
endorsed in the Utah Division of State Lands opinion.
Moreover, assuming that Utah Division of State Lands
did change controlling law, we hold that section 28(2)(b) is
inapplicable to North Star's claim. North Star is ultimately
seeking not merely a redetermination of the law, but a
redetermination of whether in fact title to the tidelands passed
to Alaska in 1959. We decline to apply section 28(2)(b) in such
circumstances. Section 28(2)(b) is paradigmatically intended to
prevent the rigid application of superseded rules of law "to
claims arising after the first proceeding has been concluded."
Restatement (Second) of Judgments 28 cmt. b (emphasis added).
It is not intended to allow a disgruntled party to challenge "his
adverse result based upon the new holding." Cole, 716 P.2d at
613.
Indeed, to allow such challenges in this setting would
be to subvert the very purpose of res judicata. We agree with
the Washington Supreme Court that change of decisional law does
not justify relief from a quiet title decree. Columbia Rentals,
Inc. v. State, 576 P.2d 62, 65 (Wash. 1978). In Columbia
Rentals, plaintiffs owned beach front property. They or their
predecessors in interest sued to determine their ocean front
boundaries. The last of those actions was resolved in 1961.
Judgment in nearly all of the cases was entered by agreement of
the parties. The judgments determined that the ocean front
boundary was the mean high tide line as of November 11, 1889.
Subsequently, in an unrelated action, the United States Supreme
Court held that owners of ocean front property were entitled to
accretions which had formed along their land. Hughes v.
Washington, 389 U.S. 290, 292-93 (1967). Plaintiffs then sued to
quiet title in the accreted lands.
The trial court granted summary judgment to the
plaintiffs. The Supreme Court of Washington reversed, holding
that res judicata precluded the plaintiffs from relitigating the
boundaries of their land. Columbia Rentals, 576 P.2d at 65. The
court reasoned that "[i]f prior judgments could be modified to
conform with subsequent changes in judicial interpretations, we
might never see the end of litigation. . . . [S]hould Hughes be
overruled, another suit to again change judgments would be in
order. That is precisely what the doctrine of res judicata
precludes." Id.
We find this reasoning of the Washington Supreme Court
particularly compelling in the present setting. As the United
States Supreme Court explained over a century ago, "[w]here
questions arise which affect titles to land it is of great
importance to the public that when they are once decided they
should no longer be considered open." Minnesota Co. v. National
Co., 70 U.S. (3 Wall.) 332, 334 (1866). Consequently, "[t]he
policies advanced by the doctrines of res judicata perhaps are at
their zenith in cases concerning real property, land and water."
Nevada v. United States, 463 U.S. 110, 129 n.10 (1983).
In sum, North Star's claim that the State received
title to the tidelands in 1959 was decided in City of Anchorage.
It is doubtful whether there has been a change in controlling
law. Assuming a change, the change would not provide a proper
basis for relitigating this issue. Thus, res judicata precludes
North Star's claim.5
B. Estoppel by deed does not apply to the present
case.
Alternatively North Star argues that the doctrine of
estoppel by deed estops the State from denying North Star's
rights to the tidelands and requires ownership to pass to North
Star. We disagree.
The doctrine of estoppel by deed generally applies when
one later becomes the owner of property he or she previously
purported to convey. 6A Richard R. Powell & Patrick J. Rohan,
Powell on Real Property, 901[2] at 81A-159 (1993). When the
grantor later acquires title, "the after acquired title inures
automatically to . . . the grantee or his or her successors."
Id. However estoppel by deed does not apply when the conveyance
is made by a quitclaim deed. Id. at 81A-160.6
In the present case, the State issued Tidelands Patent
No. 10 to the City of Anchorage in 1961.7 A patent operates as a
deed of the government. "As a deed, its operation is that of a
quitclaim . . . . It passes only the title the government has
. . . on the date of the patent." 63A Am. Jur. 2d, Public Lands
77, at 575 (1984). It follows as a general rule that
government patents are "without any covenants of warranty
whatever; and it is clear also that the doctrine of estoppel does
not apply thereto so as to pass an after-acquired title." Id.
As we have noted in connection with a patent by the
United States, the patent's effect is the same as though the
United States had executed a quitclaim deed. City of Anchorage
v. Nesbett, 530 P.2d 1324, 1329 (Alaska 1975) (quoting and
relying on Wilson Cypress Co. v. del Pozo y Marcos, 236 U.S. 635,
647-48 (1915)). State patents are subject to the same analysis.
William H. McCeney, Jr., Inc. v. Thibadeau, 137 A.2d 206, 207
(Md. 1957) ("the legal effect of a patent is to transfer to the
party in whose name it issues all the right which the State
possessed in the land that it describes, and no more.").
Tidelands Patent No. 10 therefore functioned as a quitclaim deed.
Thus, estoppel by deed does not apply in this case.8
C. AS 38.05.820 does not provide North Star with any
rights to the tidelands.
North Star argues that AS 38.05.820 provides it with
property rights to the tidelands. Alaska Statute 38.05.820(a)
"allow[s] preference rights for the acquisition of tide and
submerged land"from the State. However, the act that created
the Alaska Railroad Corporation specifically provides that AS
38.05.820 does not apply to the operations of the Alaska Railroad
Corporation. AS. 42.40.920(b)(11). Since the United States
conveyed the tidelands to the Alaska Railroad Corporation, AS
38.05.820 does not provide North Star with any rights to the
tidelands.
IV. CONCLUSION
North Star's ownership claim to the tidelands is barred
by res judicata. Estoppel by deed is inapplicable because North
Star's predecessor in interest received a quitclaim deed. Alaska
Statute 38.05.820 does not provide North Star with any rights to
the tidelands because the Alaska Railroad Corporation is exempt
from that statute. The trial court was correct in granting
summary judgment to the State and the Alaska Railroad
Corporation. AFFIRMED.
_______________________________
1 The parties agree that this appeal involves only legal
questions and that there are no disputed issues of material fact.
This court decides legal questions de novo, adopting the rule of
law which "is most persuasive in light of precedent, reason and
policy." Langdon v. Champion, 745 P.2d 1371, 1372 n. 2 (Alaska
1987) (citations omitted).
2 Specifically, North Star suggests that the United States
only retained a right of occupancy, and not a fee simple, in the
tidelands. North Star claims that Cook Inlet therefore acquired
an ownership interest in the tidelands via the conveyances from
the State and the City of Anchorage. North Star argues that when
the United States relinquished its right of occupancy in 1985,
North Star acquired unencumbered fee title.
3 As noted earlier, "[a] fee simple . . . is an estate . . .
without limitation or condition." Black's Law Dictionary 615
(6th ed. 1990).
4 In Cole, the Montana Supreme court held that in spite of
subsequent change in the law, "res judicata bars the reopening of
claimant's original case." Cole, 716 P.2d at 613. Thus, Cole
specifically holds against North Star's position. Staten Island
involved a redetermination of the law but did not involve an
attempt to set aside an earlier judgment. Staten Island, 718
F.2d at 537. Hodes and Whalen allowed relitigation based on past
events, but on the grounds that different legal rights were
involved, not on the strength of 28(2)(b). Hodes, 515 N.E.2d
at 617 ("the statutory rights of the parties were [so] altered
between the first and second proceedings" that "the two
proceedings . . . lack the requisite identity for application of
res judicata.").
5 The Alaska Railroad Corporation also argues that North
Star contractually released any ownership claims to the tidelands
when it signed the final settlement agreement in City of
Anchorage. Since we hold that res judicata bars North Star's
claim, we do not reach this issue.
6 This is because estoppel by deed "arises only where a
party [assures] the conveyance being made." Powell, supra, at
81A-160. In the case of a quitclaim deed, "the grantor merely
purports to convey such . . . interest as he or she may have, if
any. If the grantor does not have title to the property, the
grantee cannot claim to have been assured to the contrary." Id.
at 81A-160 to 161.
7 In 1965, the City in turn issued a quitclaim deed for the
tidelands at issue to North Star's predecessor in interest.
8 The appellees also argue that estoppel by deed does not
apply to the present case because the Alaska Railroad was not a
privy or party to the earlier conveyance; because the Federal
District Court in City of Anchorage voided the conveyance; and
because estoppel by deed does not apply against the government.
In light of our decision, we do not reach these issues.
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