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Ostrow v. Alaska (8/21/98), 963 P 2d 1021
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)
264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
GERRY OSTROW, )
) Supreme Court No. S-8206
Appellant, )
) Superior Court No.
v. ) 4FA-96-2468 CI
)
STATE OF ALASKA, GLEN ) O P I N I O N
FRANKLIN, STEVE JOSLIN, )
and GARY REABOLD, )
) [No. 5024 - August 21, 1998]
Appellees. )
)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Richard D. Savell, Judge.
Appearances: Michael A. Stepovich, Stepovich
Law Office, Fairbanks, for Appellant. Raymond M. Funk and Cameron
M. Leonard, Assistant Attorneys General, Fairbanks, and Bruce M.
Botelho, Attorney General, Juneau, for Appellees.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
COMPTON, Justice.
I. INTRODUCTION
In March 1995 the State of Alaska, Department of Natural
Resources, Division of Forest, Land & Water Management (State)
notified Gerry Ostrow that she had sixty days to remove her
personal property from land she had previously owned under a
contract with the State, but no longer owned after the State
terminated the contract. Ostrow failed to remove all of the
property within the sixty days. The State and the Division of
Forestry (Division) agreed that the Division would remove the
property. A contractor hired by the Division removed the property
in July 1996. Ostrow filed a tort conversion suit against the
State, and sought punitive damages from individual State employees.
The State moved for summary judgment. Based on its conclusion that
Ostrow did not have a possessory interest in the personal property
left on the land after the sixty-day grace period expired in
May 1995, the superior court granted the State's motion for summary
judgment. Ostrow appeals.
We affirm.
II. FACTS AND PROCEEDINGS
A. The Facts
In April 1982 Charles J. Clark assigned Gerry Ostrow his
interest in a land sale contract (Contract) he had entered into
with the State. The Contract conveyed nearly eighty acres of
agricultural land located on Chena Hot Springs Road. The State
approved Clark's sale/assignment to Ostrow. As a condition of the
purchase, Ostrow was obligated to "clear the land and bring it into
production according to a predetermined schedule."
In September 1989 the Department of Natural Resources
(DNR) terminated Ostrow's contract because she had defaulted on her
payments and failed to adhere to the development plan requirements.
In April 1992 the superior court affirmed the decision of the
Commissioner of DNR to terminate Ostrow's contract with the State.
Before DNR terminated the Contract, Ostrow had placed on
the property more than 300 pieces [Fn. 1] of metal culvert,
commonly called "multiplate." Ostrow had also placed on the
property five cars and trucks and a large fan. In 1995 the State
wanted to prepare the land for re-sale, and thus wanted Ostrow to
remove the multiplate and other property. On February 28, 1995,
the State sent Ostrow a letter by certified mail that reads in its
entirety: [Fn. 2]
The referenced parcel [ADL 402599 - Terminated
Agricultural Contract] was recently inspected. Substantial
quantities of industrial surplus (i.e., culvert) are located either
on the parcel or within very near proximity. Assuming that this
material may belong to you and finding that the Superior Court
decision of April 21, 1992 did not include notification to remove
your personal property from the parcel, we now deliver such
notification.
Under the terms of the contract you shall
within 60 days of the date of this notice remove all improvements
and chattels on the parcel, provided that such removal will not
cause injury or damage to the parcel or seriously impair its re-
disposal, and is authorized in the State's discretion. Following
such removal, you shall leave the parcel in a safe and clean
condition acceptable to the department. The time for removal and
clean-up may be extended where undue hardship is demonstrated.
Ostrow signed for the letter on March 25. Ostrow, therefore,
should have removed the multiplate and all other chattels from the
property by no later than May 28, 1995, or she should have
requested an extension. Ostrow did not respond to the letter.
Glen Franklin, a State employee, affied that during the
fall of 1995 he "made a series of preliminary inquiries . . . as to
the value of the multiplate remaining and found that it was likely
under $10,000 and most likely of no value, even in the
surplus/'junk market.'" On advice of the Attorney General's
Office, the State hired appraiser Chris Guinn to inspect the
personal property left on the land.
In December 1995 Chris Guinn inspected the multiplate and
miscellaneous equipment. Guinn found 300 pieces of metal culvert
on the land. He estimated that approximately thirty percent of
them were damaged. Further, he opined that, because the metal
culverts were so large, "the number of construction projects which
would have a need for these items is very limited." He also found
on the land five abandoned cars and trucks and a large fan. Based
on conversations with people in the business of selling metal
culvert, Guinn estimated the total market value of the 300 pieces
at $3,000. Guinn estimated that it would cost approximately $500
to remove the abandoned vehicles and fan from the land. Therefore,
Guinn concluded that "[a]s a result of my analysis I estimate
[that] the market value of all items as of December 1, 1995 is
$2,500."
Pursuant to Paragraph 22(c) of the Contract, and Guinn's
appraisal, the State concluded that it owned the multiplate
absolutely. Paragraph 22(c) provides:
(c) Any chattels or improvements having a
total appraised value of $10,000.00 or less, as determined by the
Seller, and which are authorized for removal by the Seller but are
not removed within the time allowed, shall become the absolute
property of Seller upon the expiration of the time allowed.
Had Guinn appraised the multiplate as being worth more than
$10,000, Paragraph 22(b) of the Contract would have required the
State to auction it off and to give the proceeds to Ostrow. [Fn. 3]
In April 1996 the State made arrangements with the Division for
removal of the multiplate and other items. The Division contracted
with a loader and trucking service for the removal.
During the spring or summer of 1996, before the
contractor had begun to remove the multiplate, Ostrow removed some
of it from the property. According to Glen Franklin, Ostrow
removed approximately 120 of the 300 multiplates. [Fn. 4] Gary
Reabold, a Division employee and defendant, affied that "[t]he
process of setting up the removal started before July[;] once out
at the site we realized that Ostrow had removed part of the
culvert." Upon realizing that Ostrow had removed some of the
multiplate, Reabold affied, he became "upset that after the
Division of Forestry had contracted to remove these state owned
culverts for its use, they had been taken by Ostrow. At this
point, we did proceed expeditiously to remove the culvert which was
in good shape." B. The Proceedings
In October 1996 Ostrow filed suit against the State and
State employees [Fn. 5] Glen Franklin, Steve Joslin, and Gary
Reabold in tort, alleging conversion of the multiplate. In her
complaint, Ostrow alleged that the State's actions violated the
Uniform Unclaimed Property Act (AS 34.45.010-.780). Ostrow
requested damages in the amount of the fair market value of the
property. Additionally, Ostrow alleged that the actions of the
Defendants Glen Franklin, Steve Joslin and
Gary Reabold amount to willful, wanton, and reckless indifference
to the rights of Ms. Ostrow and a conscious action in deliberate
disregard of those rights, entitling Plaintiff to an award of
punitive damages against the three Defendants in an amount to be
proven at trial.
The State denied all wrongdoing, asserted eight affirmative
defenses, and counterclaimed, alleging that Ostrow had converted
the multiplate that she had removed in the summer of 1996, after it
had become the absolute property of the State.
In January 1997 the State moved for summary judgment for
itself and its employees, seeking dismissal of Ostrow's claims
against it. It argued that, in light of the Contract's terms,
there were no genuine issues of material fact and it was entitled
to relief as a matter of law. First, the State argued that the
Contract's indemnity provision barred Ostrow's claim that the State
had converted her property. Second, it argued that the multiplate
was its absolute property, and thus no claim for conversion could
lie. Specifically, the State argued that it had sent Ostrow a
letter informing her that she needed to remove the multiplate
within sixty days; Ostrow failed to remove the property; the State
hired an appraiser who appraised the multiplate and other chattels
left on the property at approximately $2,500; and, because the
property was worth less than $10,000, it became the State's
absolutely, pursuant to paragraph 22(c) of the Contract. Lastly,
the State argued that punitive damages would be unsupportable
because the individual employees did not "display[] a callous
disregard for the rights of others. [Rather, they] operated
reasonably in light of the contract with due care and on the advice
[of] the Department of Law."
Ostrow opposed the State's motion and filed a Statement
of Genuine Issues. She asserted three genuine issues of material
fact. First, Ostrow argued that the Contract could not indemnify
the State against claims that the State itself committed a tort.
Second, Ostrow argued that the value of the multiplate was in
dispute. [Fn. 6] Lastly, Ostrow asserted that "[t]he affidavits of
the defendants reflect that the individual defendants knew that the
property was being moved by plaintiff, and that, in spite of this
knowledge, they proceeded to surreptitiously remove the property
and thwart ongoing efforts by plaintiff to remove it."
Furthermore, Ostrow asserted that her attached affidavit [Fn. 7]
"reflect[ed that] it is anticipated that competent evidence of the
extraordinary actions by the individual defendants will be
established through normal course of discovery which will include
their violation of and circumvention of state contracting
procedures, and which may further include their individual benefit
from the converted property." In the alternative, Ostrow argued
that the resolution of "the punitive damage issue should be held in
abeyance pending additional discovery pursuant to Alaska Civil Rule
56(f)."
The superior court heard oral argument on summary
judgment in April 1997 and granted the State's motion. This appeal
followed.
III. DISCUSSION
A. Standard of Review
This court reviews a summary judgment de novo. See
Nielson v. Benton, 903 P.2d 1049, 1052 (Alaska 1995). We will
affirm summary judgment if the record presents no genuine issues of
material fact and if the moving party is entitled to judgment as a
matter of law. See In re Estate of Evans, 901 P.2d 1138, 1140
(Alaska 1995). When making those determinations, we draw all
reasonable inferences in favor of the non-moving party. See Bishop
v. Municipality of Anchorage, 899 P.2d 149, 153 (Alaska 1995).
Once the moving party has established a prima facie case that there
are no issues of material fact, "the non-movant is 'required, in
order to prevent entry of summary judgment, to set forth specific
facts showing that he could produce admissible evidence reasonably
tending to dispute or contradict the [movant's] evidence, and thus
demonstrate that a material issue of fact exist[s].'" Jennings v.
State, 566 P.2d 1304, 1309 (Alaska 1977) (alteration in original)
(quoting Howarth v. First Nat'l Bank of Anchorage, 540 P.2d 486,
489-90 (Alaska 1975)).
B. Ostrow Did Not Have a Possessory Interest in the
Multiplate at the Time that the State Allegedly Converted It.
"[T]o maintain a cause of action for conversion the
plaintiff must establish that [she] had a certain possessory
interest in the chattel at the time of the wrongful act." McKibben
v. Mohawk Oil Co., 667 P.2d 1223, 1228 (Alaska 1983). See also
Stuart M. Speiser et al., The American Law of Torts sec. 24:2, 711
(1990) ("A plaintiff must demonstrate legal ownership or an
immediate superior right of possession to a specific identifiable
thing, and, if he cannot, his claim for conversion will fail.").
The possessory interest can be the right to immediate possession or
the right to future possession of the chattel. See McKibben, 667
P.2d at 1229.
On March 25, 1995, Ostrow signed for the letter from the
State stating that she had sixty days from receipt of the letter to
remove her personal property from the land that she had previously
owned. The letter provided that "[t]he time for removal and clean-
up may be extended where undue hardship is demonstrated."
According to both Ostrow and the State, Ostrow removed some of her
personal property during the sixty-day period. When that period
ended, she did not request additional time to remove the remaining
property from the land. According to Ostrow's deposition, she felt
that
when the State was ready to -- to really want
that property -- to dispose of that property, and when they got
serious about cleaning it up, that they would give me -- that they
would give me adequate notice. They would give me a strong letter
of intent on a -- on a deadline. . . . I did not interpret the
language to be one that . . . I had to -- to move as quickly as
they said.
Upon expiration of the sixty days, based on Guinn's
appraisal, approximately 300 pieces of multiplate, five abandoned
vehicles, and a large industrial fan remained on the land.
Paragraphs 22(b) and (c) of the Contract either made these items
the absolute property of the State, or obliged the State to sell
them at auction. Whether the State owned the property absolutely,
or was obligated to auction it and give Ostrow the proceeds, she
did not have an immediate or future possessory interest in the
property. Once Ostrow failed to remove her property from the land
within sixty days, [Fn. 8] pursuant to the Contract terms, she
forfeited her rights to ever again possess the property. Ostrow's
lack of possessory interest in the property bars her from
maintaining a tort conversion suit against the State. [Fn. 9]
IV. CONCLUSION
We AFFIRM the superior court's order granting summary
judgment. Ostrow did not have a right to possess any property left
on the State's land once the sixty-day removal period expired.
Without a right to possess the property, Ostrow cannot sue for
conversion of it. Without any genuine issues of material fact in
dispute, the State is entitled to judgment as a matter law.
FOOTNOTES
Footnote 1:
The only "official"count of the metal culvert (300 pieces)
was done by appraiser Chris Guinn in December 1995. This count,
however, took place after Ostrow had removed some of it in the
spring of 1995, so the exact number of pieces originally left on
the property is undeterminable.
Footnote 2:
According to the State, it sent this letter to Ostrow in lieu
of relying on paragraph 22(a) of the Contract. Paragraph 22(a)
provides:
The Purchaser shall, within 60 days after
termination of the Contract by the Seller or
by operation of law, remove all improvements and chattels located
on the Parcel, provided that such removal will not cause injury or
damage to the Parcel or seriously impair its re-disposal, and is
authorized in the Seller's discretion. Following such removal, the
Purchaser shall leave the Parcel in a safe and clean condition
acceptable to the Seller. The Seller may, in its discretion,
extend the time for removal of the improvements under this
subparagraph where undue hardship is demonstrated.
Had the State required Ostrow to remove the multiplate under the
terms of the Contract, she would have needed to remove it in
June 1992, sixty days from the superior court's decision affirming
the termination of the Contract.
Footnote 3:
Paragraph 22(b) provides:
If any improvements or chattels are not
removed from the Parcel within the time allowed, or are not
permitted to be removed from the Parcel by the Seller, they shall,
upon 30 days' written notice to the Purchaser, be sold at public
auction under the direction of the Seller. The proceeds of sale
shall inure to the Purchaser who placed the improvements or
chattels on the land, after deduction for the benefit of the Seller
of all monies due and owing under this Contract and all expenses
incurred in administering the termination and conducting the sale.
If there are no other bidders at any such sale, the Seller is
authorized to bid on such improvements or chattels. In such event,
the Seller shall acquire all rights, both legal and equitable,
which any other purchaser could acquire by reason of said sale and
purchase.
Footnote 4:
Both parties state that Ostrow ultimately removed 114 pieces
of the multiplate, and the State removed the remaining 186. Because
both appear to agree that the State ultimately removed 186 pieces
of multiplate, we assume that to be the correct number and not the
number referred to by Franklin.
Footnote 5:
Glen Franklin is employed by the State, and Gary Reabold and
Steve Joslin are employed by the Division. We refer to the three
individual defendants collectively as the State's employees.
Footnote 6:
Ostrow affied that she believed the multiplates could have a
value in excess of $250,000. She attached two letters to her
affidavit, one from K & K Recycling and the other from Airport
Equipment Rentals. The letter from K & K Recycling stated that the
fair market value of this multiplate is $150 per linear foot. The
letter from Airport Equipment Rentals stated that it was interested
in buying the culvert for $25 per foot.
In its reply, the State asserts that Ostrow's argument
that the appraised value of the multiplate was too low could not
create a material dispute because the Contract provides that the
appraised value is to be determined by the Seller, i.e., the State,
and there was no dispute that the State had appraised the
multiplate at $2,500.
Footnote 7:
Ostrow affied that based on her conversations with Ed Anders
he would testify that "when [Ostrow] was in the process of removing
the multi-plate from the property he had contact with Steve Joslin
who was very upset that [Ostrow] was removing [her] property and
that he would be sending trucks out immediately to prevent [Ostrow]
from continuing."
Footnote 8:
Arguably, Ostrow no longer had a possessory interest in the
property left on the land 60 days after the Contract was terminated
-- April 21, 1992. However, because the State sent Ostrow a letter
specifically granting her 60 days from the date of receipt of the
letter to remove her property, we assume that she had until May
1995 to remove the multiplate.
Footnote 9:
Without a possessory interest in the multiplate, and therefore
having no basis to maintain a tort conversion suit against the
State, Ostrow's other arguments are irrelevant. Significantly, the
issue of whether punitive damages could have been appropriate
disappears with the tort.
