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Ashley v. Baker (2/4/94), 867 P 2d 792
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Notice: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501.
THE SUPREME COURT OF THE STATE OF ALASKA
RICKY W. ASHLEY, )
) Supreme Court No. S-5250
Appellant, )
) Superior Court No.
v. ) 4FA-91-0653 CI
)
SHEILA ANN BAKER, ) O P I N I O N
)
Appellee. )
______________________________) [No. 4048 - February 4, 1994]
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Fairbanks,
Richard D. Savell, Judge .
Appearances: Robert A. Sparks, The Law
Office of Robert A. Sparks, Fairbanks, for
Appellant.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, and Compton, Justices.
[Burke, Justice, not participating.]
MATTHEWS, Justice.
COMPTON, Justice, dissenting in part.
This case involves a dispute over a deed to real
property. The deed, under which Sheila Ann Baker was grantor and
Ricky W. Ashley was grantee, described the property that it
conveyed as follows:
1/2 interest in lot 13 - sec 7 - T1S R1W
Fairbanks Meridian - specifically the 1 acre
lot with apt C located on it. Fairbanks
recording district.
Lot 13 is a two and one-half acre parcel located in Fairbanks.
Three cabins are located on the property which the parties
described as Cabins A, B, and C. Cabin A is used by Baker as her
residence, Cabin B is used as rental property, and Cabin C has at
times been used as rental property and at times as Ashley's
residence. About one-half acre of the total parcel is subject to
roadway easements.
When the deed was delivered to Ashley in the fall of
1988, Baker and Ashley were living together. Baker had
previously told Ashley that she wanted to give him a one-half
interest in Lot 13. Ashley demurred, stating that the offer was
overgenerous and that he didn't want the responsibilities of
property ownership. According to Baker, the property description
she originally wrote on the deed form was simply "1/2 interest in
lot 13 - sec 7 - T1S R1W Fairbanks Meridian." She testified,
however, that she later added the language "specifically the 1
acre lot with apt C located on it,"intending to convey to Ashley
a one-half interest in the one acre parcel containing Cabin C.
After doing this, she had the deed recorded in the Fairbanks'
recorders office. It was then delivered to Ashley by mail,
apparently without any additional comment.
After delivery of the deed, the relationship between
Ashley and Baker deteriorated and Ashley and Baker began living
in separate cabins on the lot. In April of 1991 Ashley filed the
present action against Baker to quiet the title which he was
granted by the deed, for partition, if necessary, and for damages
caused by Baker's interference with his property rights.
After much pretrial skirmishing, the case went to
trial. Ashley contended that the deed made him the owner of an
undivided one-half interest in the whole of Lot 13 or, in the
alternative, that the deed conveyed to him a 100 percent interest
in one acre surrounding Cabin C. Baker defended, arguing first
that the deed was invalid for fraud, lack of consideration, and
an inadequate description and, alternatively, if the deed was
found valid, that it conveyed only a one-half interest in one
acre which surrounded Cabin C.
The trial court rejected Baker's contentions that the
deed was invalid, but construed the deed narrowly in accordance
with Baker's contention that what was conveyed was a one-half
interest in one acre surrounding Cabin C. The trial court
further concluded that the one acre parcel should be "partitioned
and sold." It also found that Ashley owed Baker $650 in rent for
the period from September 1991 through February 1992 when Ashley
lived in Cabin C. This amount, however, was to be offset by the
$579.42 in excess taxes Ashley had paid on Lot 13. After the
offset, therefore, Ashley was to pay Baker $70. Based on these
findings the superior court entered a judgment and decree
quieting title and providing for partition and sale and for an
order of attorney's fees in favor of Baker in the amount of
$2,145.95. Ashley appeals.
I. INTERPRETATION OF THE DEED
We have noted that a three-step analysis should be
employed in interpreting a deed to real property:
1. "[L]ook to the four corners of the [deed] to see
if it unambiguously presents the parties' intent
. . . ."
2. "If the deed is ambiguous, the next step in
determining the parties' intent is a consideration of
the facts and circumstances surrounding the
conveyance."
3. "Only if these two steps do not resolve the
controversy should the court resort to rules of
construction"in deciphering the parties' intent.
Norken Corp. v. McGahan, 823 P.2d 622, 626 (Alaska 1991)
(citations omitted).1
The superior court found that the deed was ambiguous.
Ashley contests this conclusion on appeal. His argument,
however, demonstrates that the deed is ambiguous for he contends
that "the deed either conveys one-half of the lot if the one acre
language fails for lack of identification, or the deed conveys
one acre of property if the specific amount is found to be
controlling . . . ." There is also a third reasonable
possibility -- the one urged by Baker and found by the trial
court -- that the deed conveyed a one-half interest in the one
acre surrounding Cabin C.
We now consider the validity of the superior court's
holding that the deed conveyed only a one-half interest in the
one acre around Cabin C. The superior court reached this
conclusion through the following reasoning. The court first
found that both Ashley and Baker knew that Lot 13 was 2.5 acres
in area. Next, the court noted that the deed referred to a one
acre parcel. Lastly, the court noted that one half of 2.5 acres
is 1.25 acres, not one acre.2 Based on these findings, the court
concluded that Ashley's claim to one half of Lot 13 -- i.e., 1.25
acres -- would leave unexplained the deed's express reference to
a "one acre lot." Thus, "knowing the size of the lot, and based
on the testimony,"the superior court concluded that the deed
conveyed an undivided one-half interest in the one acre
containing Cabin C.
On appeal, Ashley challenges the superior court's
ruling with Baker's statement, before delivery of the deed, that
she was going to give him one half of the entire Lot 13. Ashley
argues that Baker's words should control the intended meaning of
the deed.3 The superior court, in weighing the credibility of
the witnesses, however, rejected this argument based on Baker's
testimony regarding her actions after speaking to Ashley.
Specifically, Baker testified that she originally drafted the
deed to convey a one-half interest in all of Lot 13. Before
delivering and recording the deed, however, she claims that she
added the phrase "specifically the 1 acre lot with apt C located
on it" in order to restrict the deed to a half interest in the
one acre around Cabin C. Baker claims that she made this change
for two reasons. First, when she originally spoke to Ashley, he
refused to accept her offer of the property because it was too
generous. Second, Baker overheard Ashley bragging about how he
would be entitled to half of the rents for Lot 13 if he became
half owner of the lot. To avoid these problems, Baker contends
that she reduced the amount of land covered by the deed to the
land around Cabin C. Baker's testimony that the deed was written
in two different pens supports this contention. The superior
court chose to credit Baker's testimony. Therefore, we hold that
the superior court did not err in concluding that the deed
conveyed an undivided one-half interest in the one acre
containing Cabin C.
II. COMPENSATION FOR COTENANT'S EXCLUSIVE USE
In paragraph 22 of its findings of fact, the superior
court ruled that Ashley owed Baker compensation for his exclusive
use of Cabin C:
For the period from September 1991
through February 1992, the fair rental value
of Cabin C is $200.00 per month. As tenants
in common, the parties are each entitled to
50% of the rental income. Accordingly, for
the six months from September 1991 through
February 1992, and for any occupancy after
February 1992, Ashley owes $100.00 per month
to Baker.
The superior court assumed that a cotenant's exclusive use of
joint property, without more, entitles the other cotenant to
compensation for that use. We rejected this proposition in Wood
v. Collins, 812 P.2d 951 (Alaska 1991):
As a general rule, at common law a
tenant in common who occupies all or more
than his proportionate share of the common
premises and who has not agreed to pay
therefor or ousted or excluded his cotenant
or cotenants is not liable to his cotenant or
cotenants, because of such occupancy alone,
for rent or for use and occupation.
Id. at 958 (quoting 86 C.J.S. Tenancy in Common 46 (1954))
(emphasis added). The superior court made no findings regarding
an agreement to pay or an ouster by Ashley. Thus, we hold that
the superior court erred in awarding Baker rental income for
Ashley's use of Cabin C.
III. PARTITION
The superior court ordered the partition by sale of the
one acre jointly owned by Baker and Ashley. Alaska Statute
09.45.290 provides for the partition by sale of property when
it appears that the property or a part
of it is so situated that partition cannot be
made without great prejudice to the owners
. . . .
AS 09.45.290 (emphasis added). Additionally, AS 09.45.330
provides that "[i]f it appears by evidence to the satisfaction of
the court that a partition cannot be made without great prejudice
to the owners, it shall order the sale of the property." AS
09.45.330 (emphasis added). In reviewing the superior court's
order, we face three questions. First, what is "great
prejudice"? Second, under what standard should we review a
superior court's finding of "great prejudice"? Third, did the
superior court err under the applicable standard of review? We
address each point in turn.
We have never interpreted the phrase "great prejudice"
as used in AS 09.45.290 and .330. Much authority construing the
phrase exists in other jurisdictions, however, as many states
share the "great prejudice"requirement for a partition by sale.
The consensus view is that "great prejudice"refers to economic
harm: "The established test of whether a partition in kind would
result in great prejudice to the owners is 'whether the value of
the share of each in case of a partition would be materially less
than his share of the money equivalent that could probably be
obtained for the whole.'" Haggerty v. Nobles, 419 P.2d 9, 12
(Or. 1966) (quoting Idema v. Comstock, 110 N.W. 786, 787 (Wis.
1907)) (emphasis added).4 As the Oregon Supreme Court has
emphasized, "the financial interests of the owners is the primary
factor to be considered for purposes of a determination of
prejudice in the event of partition or sale." Fike v. Sharer,
571 P.2d 1252, 1254 (Or. 1977) (emphasis added). We agree and,
thus, adopt the economic definition of "great prejudice."
The wording of AS 09.45.330 resolves the question of
standard of review. That section requires that "great prejudice"
be shown "by evidence to the satisfaction of the court." This
provision suggests that the existence of prejudice is a question
of fact -- on "evidence"-- which is committed to the discretion
of the trial court -- to determine to its "satisfaction." For
this reason, we hold that "great prejudice"is a question of fact
to be reviewed under the clearly erroneous standard.5
As Ashley argues in his brief, the superior court made
no findings regarding the economic prejudice that would result
from a partition in kind. Additionally, the record contains
little or no evidence regarding the economic feasibility of a
partition in kind. While we suspect that partition in kind of a
small lot containing an existing structure will generally pose
great prejudice to the parties, the current record and the
superior court's findings provide no support for this intuition.
Thus, we reverse the superior court's order of partition by sale
and remand for consideration of the issue of great prejudice.
IV. ATTORNEY'S FEES
The superior court concluded, without explanation, that
Baker was "the prevailing party"and that "[s]he may move to
recover her attorney fees and costs." This decision is "within
the broad discretion of the trial court" and will not be
disturbed unless "manifestly unreasonable." Day v. Moore, 771
P.2d 436, 437 (Alaska 1989).
"As a general rule, . . . the 'prevailing party' is
considered to be the party who has successfully prosecuted or
defended against the action, the one who is successful on the
'main issue' of the action and 'in whose favor the decision or
verdict is rendered and the judgment entered.'" Adoption of
V.M.C., 528 P.2d 788, 795 n.14 (Alaska 1974). Recently, in
Hillman v. Nationwide Mutual Fire Ins. Co., 855 P.2d 1321 (Alaska
1993), we further elaborated upon the prevailing party
requirement. We stated that a plaintiff can be the "prevailing
party" though not receiving the full recovery sought if the
"plaintiff prevailed on the basic liability question and received
an affirmative recovery based on its successful litigation of
that question, which was substantial in amount." Id. at 1328.
The present case offers a similar situation. The "basic
liability question" contested by Ashley and Baker was the
validity of the deed. Ashley sought to quiet title to a portion
of Baker's property and, toward that end, he sought to establish
the existence of a valid deed. In her answer, Baker sought,
among other things, a "declaratory judgment that . . . Ashley
. . . has no right, title, interest, lien or any other claim
relating to" her property. The superior court considered and
ultimately rejected Baker's argument that the deed was invalid.
Ashley, then, prevailed on this issue. While, as with the
plaintiff in Hillman, Ashley did not receive all that he sought -
- he sought one half of 2.5 acres or, alternatively, all of one
acre, and received one half of one acre -- he did receive a
substantial recovery. Thus, we hold that Ashley was the
prevailing party in the trial court.
V. CONCLUSION
We AFFIRM the superior court's interpretation of the
deed. We REVERSE the superior court's award of compensation to
Baker for Ashley's exclusive use of Cabin C; the superior court's
order of partition by sale; and the superior court's award of
attorney's fees. The issue of partition is REMANDED for the
superior court's consideration of the question of great
prejudice. The issue of attorney's fees is also REMANDED for the
calculation of an attorney's fees award for Ashley.
COMPTON, Justice, dissenting in part.
The court correctly notes that the superior court
determined Baker to be "the prevailing party"without offering
any explanation for its conclusion. The court then cites
authority which defines "prevailing party"and authority which
articulates the standard of review. It then holds that Ashley
was the prevailing party as a matter of law.
I am not able to conclude on the record before us that
Ashley was the prevailing party as a matter of law. I believe
the correct disposition would be to vacate the award of
attorney's fees and costs, and remand the issue for
redetermination in light of this court's decision. The superior
court should be instructed to explain the reasons for its
redetermined conclusion.
In all other respects I agree with the opinion of the
court.
_______________________________
1 We note that this seemingly rigid three-step
formulation may be out of step with our approach to contract
interpretation. While we generally find an unambiguous contract
term to be dispositive of the parties' intended meaning, see
Klosterman v. Hickel Investment Co., 821 P.2d 118, 124 (Alaska
1991) ("Where a contract provision is unambiguous, we will
ascertain the parties' intention from the instrument itself."),
we do not require a threshold finding of ambiguity before
considering extrinsic evidence of the parties' expectations.
Rather, our analysis is more fluid:
When interpreting contracts, the goal is
to "give effect to the reasonable
expectations of the parties." Mitford v. de
Lasala, 666 P.2d 1000, 1005 (Alaska 1983).
In pursuit of this goal, the court must "look
first to the written agreement itself and
also to extrinsic evidence regarding the
parties' intent at the time the contract was
made." Norton v. Herron, 677 P.2d 877, 880
(Alaska 1984).
Stepanov v. Homer Elec. Ass'n, 814 P.2d 731, 734 (Alaska 1991)
(emphasis added). We have no occasion in this case, however, to
reconsider the Norken approach.
2 The court noted Ashley's argument that one half of the
unencumbered two acres of Lot 13 equals one acre. In other
words, Ashley attempted to harmonize the deed's reference to one
half of Lot 13 and to a one acre parcel by arguing that the deed
referred only to one half of the unencumbered two acres of Lot
13. The court, however, rejected Ashley's argument because it
found that neither Ashley nor Baker were thinking of the half
acre of easements over Lot 13 at the time of the deed.
3 Ashley also argues that Baker's words and actions after
delivery of the deed should estop her "from taking the position
that the deed conveyed less than one-half of the lot to him, or,
alternatively, the one acre specifically mentioned in the deed
. . . ." Ashley argues that he relied on Baker's
"representations and actions"in making substantial improvements
to the entire parcel and that this reliance should estop Baker
from arguing a more limited scope of the deed. See Bibo v.
Jeffrey's Restaurant, 770 P.2d 290, 293 (Alaska 1989). This
argument fails for two reasons.
First, Ashley does not identify any post-delivery
"representations and actions"that he relied upon in making
improvements. Indeed, Ashley did not make this argument below
and, thus, the superior court could not address Baker's post-deed
words or actions. Since Ashley did not raise this point at
trial, and since resolution of this issue would require resort to
"new or controverted facts,"we do not address this point on
appeal. Sea Lion Corp. v. Air Logistics of Alaska, 787 P.2d 109,
115 (Alaska 1990).
Second, we note that even if Ashley properly raised
estoppel, the superior court gave little credit to Ashley's claim
that he made significant improvements to the entire lot. Thus,
Ashley would not be able to show detrimental reliance.
4 See also Delfino v. Vealencis, 436 A.2d 27, 31 (Conn.
1980); Patrick v. Preiser, 341 N.Y.S.2d 806, 808-10 (Sup. 1972)
("[G]reat prejudice"does not "include the possibility of future
felonious assaults by one tenant in common against another.");
Schnell v. Schnell, 346 N.W.2d 713, 716 (N.D. 1984).
5 This holding is amply supported by authority from other
jurisdictions. See, e.g., Beebout v. Beebout, 447 N.W.2d 465,
467 (Minn. App. 1989); Frank DeHaan, Inc. v. Gallatin-Madison
Ranch Co., 820 P.2d 423, 426 (Mont. 1991); Berg v. Kremers, 181
N.W.2d 730, 734 (N.D. 1970); Gillmor v. Gillmor, 657 P.2d 736,
739 (Utah 1982).
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