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Opinion # 4818
Diksen v. Troxell (3/28/97) sp-4796
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Notice: This opinion is subject to 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, phone (907) 264-0607, fax (907)
264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
SONJA DIKSEN, individually )
and as legal guardian of ) Supreme Court No. S-6538
SHARMON SUTOR, KATRINA SUTOR )
and TROY SUTOR, )
)
Appellant, )
) Superior Court No.
v. ) 3KN-93-13 CI
)
NICK TROXELL, ) O P I N I O N
)
Appellee. ) [No. 4796 - March 28, 1997]
______________________________)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Kenai,
Jonathan H. Link, Judge.
Appearances: Arthur S. Robinson, Robinson, Beiswenger &
Ehrhardt, Soldotna, for Appellant. Mark Rindner, Glen E.M.
Yaguchi, Lane Powell Spears Lubersky, Anchorage, for Appellee.
Before: Compton, Chief Justice, Rabinowitz, Matthews, Eastaugh,
Justices, and Shortell, Justice, pro tem.
MATTHEWS, Justice.
I. INTRODUCTION
A transferor of a limited entry permit may not retain a
property interest in the permit. Diksen sued Troxell for money
owed under an oral transfer agreement. Troxell obtained summary
judgment on the ground that the agreement was a lease and thus
illegal. A lease must have a retransfer term. Because there is a
fact issue as to whether the agreement contained a term under which
Troxell would retransfer the permit, we reverse.
II. FACTS AND PROCEEDINGS
Sonja Diksen is the mother of four children, Corinna,
Sharmon, Troy, and Katrina. Prior to 1988, Diksen was married to
John Boggs, who is the father of two children, John Ed and Mary.
In 1978 Diksen and Boggs decided to invest the savings of their
children in a Kodiak purse seine limited entry permit. Around the
same time, Boggs purchased a fishing boat, the Sally J, in
partnership with Nick Troxell. In February 1979 Diksen purchased
a permit for $80,000, using the children's $30,000 savings and
$50,000 she and Boggs loaned the children. (EN1) Diksen registered
the permit in her own name.
In June 1980 Diksen transferred the permit to Troxell who
promised orally to pay the children ten percent of the gross
revenues earned from fishing the permit. For the eight years from
1980 to 1987, Troxell made yearly payments to Diksen. She
distributed the money to the children according to the percentage
each had contributed to the original investment.
Boggs and Diksen separated in 1986 and divorced in 1988.
In August 1986 Diksen purchased her daughter Corinna's interest in
the permit agreement. In June 1988 she purchased her daughter
Katrina's interest.
In 1988 Troxell bought John Ed's and Mary's interests in
the permit agreement. Troxell offered to buy Diksen's and her
children's interests on the same terms, but no agreement was
reached. Troxell did not make any payments to Diksen or her
children for the 1988 fishing season and has not made payments
since then.
In 1993 Diksen sued Troxell, alleging that his failure to
pay her and her children their fraction of ten percent of the gross
revenues constituted a breach of their contract; she also claimed
Troxell would be unjustly enriched if he was not required to pay
for the permit. Diksen sought only monetary damages, not posses-
sion of the permit.
Troxell moved for summary judgment. His motion was
granted without opinion. Diksen appeals.
III. DISCUSSION
Limited entry permits are transferable through the
Commercial Fisheries Entry Commission. AS 16.43.170. However,
with exceptions not here relevant, entry permits cannot be pledged,
mortgaged or leased. The transferor may not retain a right to
regain, or control the disposition of, a transferred permit.
Alaska Statute 16.43.150(g) provides in relevant part:
Except as provided in [exceptions not
here relevant] an entry permit may not be
(1) pledged, mortgaged, leased, or
encumbered in any way;
(2) transferred with any retained right
of repossession or foreclosure, or on any
condition requiring a subsequent transfer; or
(3) attached, distrained, or sold on
execution of judgment or under any other
process or order of any court . . . .
In his motion for summary judgment, Troxell advanced two
arguments relevant to AS 16.43.150(g). First, noting that Diksen
had executed an affidavit in connection with the transfer of the
permit which affied that the permit was not encumbered, he
contended that she should be bound by the representations made in
the affidavit. Therefore, "her claims of an ownership interest in
the permit, and to income derived therefrom, must fail as a matter
of law . . . ."(EN2)
Second, Troxell argued that the transaction was a lease;
as such it was illegal and therefore wholly unenforceable. In
support of his characterization of the transaction as a lease he
cited a letter from Diksen dated February 9, 1989, in which she
referred to the transaction as a lease.
In opposition to the motion, Diksen argued that there
were genuine issues of material fact as to whether the oral
agreement transferring the permit contained a promise by Troxell to
retransfer the permit to Diksen. (EN3) Diksen characterized the
transaction as a sale in which the consideration was the agreement
to pay ten percent of the gross revenues obtained from fishing the
permit. In an affidavit filed with the memorandum in opposition to
the motion she described the transaction as follows:
The original intent of the oral contract
between Troxell, Boggs Enterprises, and myself
representing the children, was for the
children to be able to make money off their
investment and contribution of the money to
buy the permit for the fishing venture.
Troxell was to derive income from the venture
as half owner of the Sally J. My ex-husband,
Boggs, would derive income from the 50%
ownership of Boggs Enterprise in the Sally J
and the children would derive income from
their $80,000.00 payment for the cost of the
permit. Troxell was always to keep the permit
and use it in the venture. The venture was to
last indefinitely so long as the Sally J and
the permit were used to catch and sell fish.
On appeal, Diksen generally repeats the arguments she
made in opposition to the motion for summary judgment. Troxell
again makes the argument that the agreement was a lease. He also
contends that Diksen lacks standing to sue for her children as they
are now adults and the real parties in interest.
Troxell does not argue, as he did before the superior
court, that the consideration for the transfer of a permit may not
include a contractual obligation on the part of the transferee to
pay a share of the proceeds earned by the transferee in using the
permit. We are aware of no reason why such an obligation would not
be legal when it is not secured by a retained interest in the
permit. This ground, then, can not be used to support the award of
summary judgment.
Troxell's real party in interest argument also does not
support the summary judgment. Alaska Civil Rule 17(a) permits "a
party with whom or in whose name a contract has been made for the
benefit of another"to "sue in his own name without joining with
him the party for whose benefit the action is brought." Diksen is
suing on such a contract. Further, before an action can be
dismissed because it is not prosecuted in the name of the real
party in interest there must be an order which identifies the real
parties in interest; and they must be given an opportunity to
ratify the action or join it within a reasonable time. Civil Rule
17(a); KOS v. Williams, 616 P.2d 868, 870 (Alaska 1980). There was
no such order in this case. Moreover, Diksen is clearly the real
party in interest with respect to the interests in the permit
agreement which she purchased from her children.
The important characteristic of a lease for purposes of
AS 16.43.150 is that a transferor/lessor has the right to regain
possession of the leased property -- here the permit -- at the end
of the lease term. There must, in other words, be an express or
implied promise by the transferee to retransfer the permit to the
transferor. Transamerica Leasing Corp. v. Bureau of Revenue, 450
P.2d 934, 937 (N.M. App. 1969); In re Peacock, 6 B.R. 922, 925
(Bankr. N.D. Tex. 1980). (EN4)
Diksen's characterization of the transaction as one
involving a lease in her letter of February 9, 1989, is evidence
that the transaction was a lease. There is also other evidence of
a retransfer agreement. In her deposition Diksen testified that
there was an understanding that in the event Troxell did not desire
to fish the permit any longer "it would go back into my name."
In support of the argument that the transaction was not
a lease -- that there was no agreement that Troxell would
retransfer the permit -- is Diksen's affidavit filed in opposition
to the motion for summary judgment, quoted above. In addition,
Troxell, in his deposition, denied that Diksen had a retained
interest in the permit of any sort:
Q: Was there ever an understanding between you
and John or Sonja that if the permit wasn't
used that it would go back in Sonja's name?
A: No. I don't believe that there was ever any
kind of an agreement like that.
Likewise, Boggs gave similar testimony:
Q: So my question is at the time or just prior to
the time or any time prior to the permit being
transferred to Nick, was there any agreement
with anybody, you, Sonja, Nick, Boggs
Enterprises, Nick, anybody, that Nick would
sometime transfer that permit back to Sonja,
or one of the kids or anything like that?
A: Not that I remember.
. . . .
Q: At the time that the permit was transferred
from Sonja to Nick Troxell, was there ever any
intent that this permit would ever come back
to Sonja?
A: No. Absolutely not.
The foregoing conflicting evidence suffices to raise a genuine
issue of material fact as to whether the oral agreement between
Troxell and Diksen contained an express or implied promise by
Troxell to reconvey the permit to Diksen. Thus the trial court
erred in granting Troxell's motion for summary judgment.
IV. CONCLUSION
In this case both parties made evidentiary admissions
which conflict with their respective legal positions. These
admissions, and other evidence, create a genuine issue of material
fact as to whether the transfer agreement contained an illegal
term. The superior court erred in granting summary judgment. The
judgment in this case is therefore reversed and this case is
remanded for further proceedings in which the nature and terms of
the parties' agreement should be determined. If the agreement is
found to contain an illegal term, the agreement should not be
enforced; otherwise, judgment consistent with the agreement should
be entered.
REVERSED and REMANDED.
ENDNOTES:
1. The loan was repaid by the children.
2. The permit transfer affidavit stated as follows:
I swear, under penalty of perjury, that the
information supplied by me on this form is
true, that this transfer is not requested as
part of, nor in anticipation of, any lease,
pledge, mortgage or other encumbrance
involving the permit listed above . . . .
3. Summary judgment may not be granted where there are genuine
issues of material fact. Alaska R. Civ. P. 56
4. "At common law a lease of personal property is a bailment for
hire." Official comment to sec. 2A-103j; Uniform Commercial Code,
codified as AS 45.12.103(10). "A relationship of bailor-bailee
arises when the owner, while retaining general title, delivers
personal property to another for some particular purpose upon an
express or implied contract to redeliver the goods . . . ." Bruton
v. Automatic Welding & Supply Corp., 513 P.2d 1122, 1126 (Alaska
1973) (quoting Maulding v. United States, 257 F.2d 56, 60 (9th Cir.
1958)).
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