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Cook Schuhmann & Groseclose, Inc v Brown & Root (07/08/2005) sp-5921
Cook Schuhmann & Groseclose, Inc v Brown & Root (07/08/2005) sp-5921
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| COOK SCHUHMANN &
| ) |
| GROSECLOSE, INC.,
| ) Supreme Court No. S-
10922 |
| ) |
| Appellant,
| ) Superior Court No. 4FA-02-1216
CI |
| ) |
| v.
| ) OPINION ON
REHEARING |
| ) |
| BROWN &
ROOT, INC., | ) [No. 5921 - July 8,
2005] |
| ) |
| Appellee.
| ) |
| ) |
|
|
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Richard D. Savell, Judge.
Appearances: Robert B. Groseclose, Jo A.
Kuchle, and Peter M. LeBlanc, Cook Schuhmann
& Groseclose, Inc., Fairbanks, for Appellant.
James D. DeWitt and Aisha Tinker Bray, Guess
& Rudd P.C., Fairbanks, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
EASTAUGH, Justice.
BRYNER, Chief Justice, dissenting in part.
I. INTRODUCTION
The beneficiary of a second deed of trust contends that
a nonjudicial foreclosure sale on the first deed of trust was not
fair and reasonable and violated the controlling statutes. The
trustee halted the sale and postponed it for four hours to give
two prospective bidders time to obtain cash or cashiers checks.
Because this procedure was not unfair or unreasonable under the
circumstances presented here, we affirm the summary judgment for
Brown & Root, Inc., whose offset bid was the only bid received at
the reconvened sale auction. We also affirm the Alaska Civil
Rule 68 award of attorneys fees to Brown & Root. Its offer of
judgment offering to reconduct the foreclosure sale was neither
premature (even though it was made before the parties exchanged
Alaska Civil Rule 26 disclosures) nor ambiguous.
II. FACTS AND PROCEEDINGS
Michelle Lisper and Linda Jean Ross held two parcels of
real property in Fairbanks subject to a first deed of trust
issued February 7, 1994 in favor of Brown & Root. The deed of
trust secured an obligation to make a payment of $200,000, plus
interest, on or before April 1, 1998. Yukon Title Agency was
named as trustee.1 In 1995 Lisper and Ross granted a second deed
of trust to appellant, Cook Schuhmann & Groseclose, Inc. (Cook),
to secure an indebtedness of $25,000. Both deeds of trust
provided for sale of the property upon default to the highest and
best bidder for cash in lawful money of the United States,
payable at time of sale.
When Lisper and Ross failed to make the payments due on
the first deed of trust, Brown & Root executed a Beneficiarys
Declaration of Default and instructed Yukon Title to initiate
foreclosure. The sale was noticed for January 14, 2002, but was
continued at the beneficiarys request to March 28, 2002 at 10
a.m. The Notice of Default and Sale stated that the property
would be sold for cash or cashiers check to the highest bidder at
public auction. The notice stated the sum owing on the
obligation, but not the amount of the anticipated offset bid.
On March 28, 2002 Catherine Floerchinger, vice-
president of Yukon Title, went to the Rabinowitz Courthouse to
conduct the foreclosure sale. Cooks representative, Jo Kuchle,
was among those present. Floerchinger asked if anyone planned to
bid at the sale. Terry Stahlman indicated a desire to bid.
Floerchinger took him aside and reviewed his funds to ascertain
whether he had sufficient funds to exceed Brown & Roots
anticipated offset bid of $302,957. Because Stahlman only had a
cashiers check for $300,000, Floerchinger told him he was not
qualified to bid at the sale.
Floerchinger began the foreclosure sale and entered the
beneficiarys offset bid. When she asked if there were any other
bidders, Cliff Everts attempted to bid $305,000. Floerchinger
asked why he had not identified himself earlier; Everts responded
that he was hard of hearing and had not heard her ask.
Floerchinger took him aside to determine whether he had
sufficient funds to bid. He had no cash or certified funds, but
told Floerchinger that he could obtain the money from his banker.
Having determined that no qualified bidders, apart from
the beneficiary, were present, but that two potential bidders
might become qualified, Floerchinger decided to postpone the
sale. She informed the group that the sale was postponed until 2
p.m. that day. Following Floerchingers announcement, Stahlman
told the group that he would have bid up to $350,000. Shortly
thereafter Stahlman and Everts discussed whether they would
attend the postponed sale. Stahlman told Everts that if Brown &
Root obtained title to the property, it would strip off the
junior liens, at which time one of them could purchase the
property for less money.
At 2 p.m. Floerchinger returned to the courthouse to
hold the sale. Stahlman and Everts were not present.
Floerchinger submitted Brown & Roots offset bid. No one else
bid, so Floerchinger sold the property to the beneficiary for the
offset bid. Yukon Title issued a trustees deed to Brown & Root
on April 9, 2002.
Cook filed a superior court complaint against Brown &
Root on May 21, 2002. It alleged that Brown & Root failed to
conduct a commercially reasonable sale, violated AS 34.20.080(e),
and tortiously interfered with Cooks second deed of trust. The
complaint requested that the court place an equitable lien on the
property, set aside the sale, enter a judgment against Brown &
Root for the amount of Cooks junior lien ($25,000 plus statutory
interest), enter a judgment against Brown & Root for all economic
and noneconomic damages and for attorneys fees and costs, and
provide such additional relief as the court deemed just and
equitable.
Brown & Root served a Rule 68 offer of judgment on Cook
on July 9, 2002. Among other things, the offer of judgment
offered to re-conduct the foreclosure sale and to cover the
expense of the notice and sale. On September 5, 2002 Brown &
Root moved for summary judgment. The superior court granted the
motion. Citing Rule 68(b)(1), Brown & Root then moved for an
award of seventy-five percent of its attorneys fees. The
superior court awarded fees in the amount Brown & Root requested.
The court entered final judgment on January 23, 2003.
Cook appeals.
III. DISCUSSION
A. Whether the Nonjudicial Deed of Trust Foreclosure Sale
Must Be Set Aside as Unfair or Unreasonable
1. Standard of review
A grant of summary judgment is reviewed de novo.2 We
review the facts presented in a light most favorable to the
non-movant to determine whether any genuine issues of material
fact exist and whether the movant is entitled to judgment as a
matter of law.3
2. Whether the nonjudicial deed of trust foreclosure sale was
unfair or unreasonable
Cook argues that Brown & Root violated Alaska law in
conducting a nonjudicial deed of trust foreclosure sale that was
unfair and unreasonable. It reasons that the notice of sale was
deficient because it failed to reveal the amount of the
anticipated offset bid. It also argues that the notice was
deficient because it failed to warn potential bidders that the
trustee would regard any bidder without enough cash or a large
enough cashiers check to match the trustees bid as unqualified to
bid on the property. Finally, it asserts that the trustee
violated Alaska law by postponing the sale after it had started.
We have stated our reluctance to set aside foreclosure
sales except in the most unusual circumstances.4 Even when the
sale fails to comply with the statutory provisions, we will set
it aside only in cases that reach unjust extremes.5
The statutory conditions were met here. Alaska law
does not require the trustee to give prospective bidders notice
of the amount of the anticipated offset bid or inform them that
the trustee may require them to demonstrate their ability to pay
their bids in cash or cashiers checks at the time of sale.
Alaska law only requires that the trustee record a notice of
default that specifies the name of the trustor, the book and page
where the trust deed is recorded, a description of the trust
property, a statement that a breach of the obligation for which
the deed of trust is security has occurred, the nature of the
breach, the sum of the obligation, the election by the trustee to
sell the property, and the date, time, and place of the sale.6
The statute requires notice of the amount of the obligation; it
does not require notice of the amount of the anticipated offset
bid.7 Nor does it require notice that the trustee may require
bidders to demonstrate their ability to satisfy the sale terms.8
Cook conceded at oral argument on appeal that nothing in the
statute precluded the procedure followed here.
No Alaska statutes or cases specify a procedure by
which the trustee must conduct a foreclosure sale. Alaska
Statute 34.20.080 only requires that the procedure comply with
the terms and conditions of the deed of trust. Here the deed of
trust required the buyer to pay cash at the time of sale. It
stated: Trustee . . . shall sell said property . . . at public
auction, to the highest and best bidder for cash in lawful money
of the United States, payable at time of sale. Per the deed of
trust, the trustee was to provide written notice of the default
and the sale. The notice of default announced that the property
would be sold for cash or cashiers check to the highest bidder at
public auction.
We next consider whether the procedure followed here
inherently rendered the sale unfair and unreasonable, requiring
that we set it aside. Potential bidders with advance notice of
the amount of the beneficiarys proposed offset bid might well be
better able to bid successfully at the auction. But we are not
convinced that the failure of a notice to state the amount of the
anticipated offset bid prevents potential bidders from either
independently calculating that amount or asking the trustee how
to calculate it.
We also agree that giving advance notice that the
trustee will require cash or a cash equivalent at the auction
would potentially benefit those who, like Cook, hold junior deeds
of trust.9 Holders of junior deeds of trust would also
potentially benefit from a procedure that would allow at least
some appropriate grace period between receipt of the high bid and
payment of the required cash or cashiers check.
But it is not necessary to decide in this case whether
a notice that fails to inform bidders that the trustee will
require immediate payment in cash or a cash equivalent
necessarily renders the foreclosure sale unfair and unreasonable.
Nor is it necessary to decide whether a foreclosure sale becomes
unfair and unreasonable if the trustee declines to give the
apparent high bidder a brief grace period in which to secure the
required cash or cashiers check. We do not have to decide those
questions because the postponement (the third procedural
deficiency alleged by Cook) actually remedied any other possible
procedural deficiencies. Neither AS 34.20.070 nor the deed of
trust precluded the trustee from postponing the sale when it
appeared that both prospective bidders other than the beneficiary
had insufficient cash (or its equivalent) to consummate a sale at
the scheduled time. The deed of trust gave the trustee authority
to postpone the sale. By giving two prospective bidders actual
knowledge of the amount of the offset bid and the need for cash
or its equivalent, postponement provided some of the advance
notice Cook advocates.
Also, neither Stahlman nor Everts was prepared to pay
in cash or by cashiers check at the close of the 10 a.m. sale.
Postponement therefore gave them an opportunity to cure their
inability to consummate a sale if one of them was the high
bidder; postponement potentially allowed them to submit
qualifying bids. As it turned out, they apparently conferred,
chose not to bid against each other, and elected not to return
when the trustee reconvened the auction at 2 p.m. But Cook has
directed us to no evidence that Brown & Root or the trustee
procured their absence or colluded with them, or otherwise
behaved in a way that was intended to disfavor Cook. The
postponement potentially benefitted Cook. Had the sale taken
place at 10 a.m., the only qualifying bid would have been Brown &
Roots offset bid; a sale that morning as scheduled would have
therefore inevitably erased Cooks second deed of trust.
Brown & Root also argues that Cook failed to preserve
any objection to the procedure or postponement. Given our ruling
on the merits of these issues, we do not need to consider whether
Cook waived or preserved the issue.
B. Whether Brown & Root Made a Valid Offer of Judgment by
Offering To Reconduct the Foreclosure Sale
1. Standard of review
The interpretation of Rule 68 is a question of law that
[this court] review[s] de novo, adopting the rule of law that is
most persuasive in light of precedent, policy and reason. 10 We
review awards of costs and attorneys fees for abuse of
discretion, which exists if an award is arbitrary, capricious,
manifestly unreasonable, or improperly motivated.11
2. Validity of the offer
Cook challenges the superior courts award of Rule 68
attorneys fees to Brown & Root. Rule 68 provides in part:
(b) If the judgment finally rendered by the
court is at least 5 percent less favorable to
the offeree than the offer . . . the offeree
. . . shall pay all costs as allowed under
the Civil Rules and shall pay reasonable
actual attorney fees incurred by the offeror
from the date the offer was made as follows:
(1) if the offer was served no later
than 60 days after both parties made the
disclosures required by Civil Rule 26,
the offeree shall pay 75 percent of the
offerors reasonable actual attorney
fees.
On January 3, 2003 the superior court awarded Brown & Root
seventy-five percent of its attorneys fees, in accordance with
Rule 68(b)(1). Cook challenges the award on several grounds.
Cook first argues that the offer was untimely because
it was made before the parties exchanged Alaska Civil Rule 26
disclosures. Cook reads Rule 68 to apply only to offers made
after Rule 26 disclosures are exchanged because, it reasons, this
ensures that the parties possess sufficient information to
evaluate the offer. Brown & Root argues that its offer, which
was served before Rule 26 disclosures were due, was not premature
under Rule 68(b)(1).
Because Rule 68 does not preclude pre-disclosure offers
of judgment, the offer of judgment here was timely. Rule 68 has
the purpose of encouraging settlements and avoiding protracted
litigation.12 If an offer is served no later than sixty days
after Rule 26 disclosures are made, the offeror recovers seventy-
five percent of its attorney fees.13 If the offer is served after
the sixty-day deadline but more than ninety days before trial,
the offeror recovers fifty percent of its attorney fees; it
recovers thirty percent if the offer is served ninety days or
less but more than ten days before trial.14 The rule therefore
penalizes parties for delay. But it does not say when in a civil
action a party may first make an offer of judgment. Rather, it
states only when a party may last make an offer of judgment:
either party may make an offer [a]t any time more than 10 days
before the trial begins.15 Because Brown & Root made its offer
before the sixty-day deadline contemplated by subpart (b)(1), its
offer was timely for purposes of awarding fees at the enhanced
rate.16
Cook filed a petition for rehearing after we issued our
original opinion of June 18, 2004. Cooks petition argued for the
first time that the history of the legislation which amended AS
09.30.065 and which was the basis for our 1997 amendment of Rule
68 supports Cooks view that Rule 68(b)(1) does not apply to
offers of judgment made before Rule 26 disclosures are exchanged.17
We asked Brown & Root to respond to the petition.
Cooks petition argued that comments of Representative
Porter, the bills sponsor, support its interpretation of the
meaning of the proposed amendment. On February 21, 1997,
Representative Porter made these comments before the House
Judiciary Committee:
[O]ffers of judgment are, after a case has
been filed, one party or the other can make a
formal offer to settle the case. And what
were trying to do is to inspire reasonable
offers and reasonable assessment of those
offers and taking them if they are
reasonable, consequently eliminating the
costs of the process up to and including the
trial, which is a cost to both parties and
the state and everybody else.
. . . .
If that offer was made real early, then it
would be real expensive to you if that
happened, and a little bit less if it was
made later and a little bit less if it was
made later.
. . . .
Consequently, what were saying is that if
this offer is made within a short period of
time, from the ability that you would have
after a case is filed to get discovery, so
you kind of know where youre at, if a short
period of time after that the offer is made,
60 days after that, and you dont accept it,
and when you finally go to trial, the offer
is within 5 percent of less than what you
would have settled for, youve got to pay all
reasonable actual attorneys fees and costs,
from the time the offer was made until the
judgment was entered. This is an inducement.
. . . .
If the offer is made later than that 60 days
after discovery, it goes down to 75 percent.
If made just really a short time, 30 days
before trial or something, then it goes down
to 50 percent. Obviously, it is intended to
make people, as early on as possible, assess
their positions and make reasonable offers
and have them accepted.
Representative Porters comments seem to reflect an assumption
that a knowledgeable offer could be made after the disclosures
required by Civil Rule 26(a). But his words do not expressly
suggest that he intended that any earlier offer would be
premature and therefore invalid, the issue that is now before us.
The text of the rule, the identical text of the underlying
statute, and Representative Porters comments do not convince us
that offers made before the parties have made their initial
disclosures are premature, and therefore ineffective. Such an
interpretation, moreover, would mean that no offer could be
effective under either AS 09.30.065(a)(1) or (2) (and thus, under
Rule 68(b)(1) or (2)) unless both parties had made the
disclosures required by the civil rules. This would mean that a
party failing to make the required disclosure could purposefully
or unintentionally interfere with the offer process. Further,
such an interpretation would conflict with the first sentence of
Rule 68(a), which permits offers to be made [a]t any time more
than 10 days before the trial begins.
Consequently, we hold on rehearing that the offer was
not premature and that it was not invalid even though it was made
before the parties made Rule 26 disclosures.18
Cook next contends that the offer was ambiguous. Cook
argues, among other things, that the offer was invalid because it
failed to state a definite sum. We conclude that the offer was
valid. It unambiguously described exactly what relief Brown &
Root would provide if the offer were accepted. Although we held
in Farr v. Stepp that [a]n offer of judgment must specify a
definite sum and must be unconditional, our real concern in that
case related to the specificity of the offer rather than its
communication of a monetary amount.19 Rule 68 permits offers that
allow judgment for the money or property or to the effect
specified in the offer.20 Nonmonetary offers of judgment are
valid under the rule so long as they are unambiguous and
unconditional.
We recognize that this result could potentially raise
at least one additional question with respect to attorneys fees
awards: how are courts to quantify a nonmonetary offer in
determining whether it was five percent more favorable than the
judgment? We need not address that issue here, however, because
it was not squarely raised by Cook on appeal. Moreover, we think
there is no question that the judgment for Brown & Root was far
less favorable to Cook than the offer of judgment.
IV. CONCLUSION
For these reasons we AFFIRM the judgment below.
BRYNER, Chief Justice, dissenting in part.
I disagree with the courts conclusion that Brown &
Roots offer of judgment exposed Cook to an enhanced award of fees
under Civil Rule 68(b).
Civil Rule 68(b) strives to encourage prudent efforts
toward early settlements by defining three time frames in which
refusing an offer of judgment will be deemed unreasonable and can
trigger penalties. The first time frame, set out in paragraph
(b)(1), is at issue here:
(b) If the judgment finally rendered by
the court is at least 5 percent less
favorable to the offeree than the offer, or,
if there are multiple defendants, at least 10
percent less favorable to the offeree than
the offer, the offeree, whether the party
making the claim or defending against the
claim, shall pay all costs as allowed under
the Civil Rules and shall pay reasonable
actual attorney fees incurred by the offeror
from the date the offer was made as follows:
(1) if the offer was served no later
than 60 days after both parties made the
disclosures required by Civil Rule 26, the
offeree shall pay 75 percent of the offerors
reasonable actual attorney fees[.][1]
Rejecting an offer during this time frame can result in requiring
the offeree to pay seventy-five percent of the offerors ultimate
fees. But the wording of paragraph (b)(1) is ambiguous because
it leaves the exact period encompassed within this provision
unclear.
At least two readings are plausible. First, the
provision can reasonably be read to define a period that begins
upon the filing of initial disclosures after both parties made
the disclosures and that ends no more than sixty days later no
later than 60 days after. Alternatively, the provision might be
read as describing a period with no real beginning in other
words, as allowing offers under paragraph (b)(1) to be served as
early as the parties please, but no later than 60 days after
their initial disclosures. Todays opinion chooses the latter
meaning; but in doing so, it ignores the provisions history, as
well as its purpose, and offers no sound reason to support this
choice.
The opinion begins by recognizing yet disregarding
strong legislative history that favors the first meaning. On
February 21, 1997, House Bill (H.B.) 58s sponsor, Representative
Brian Porter, described to the House Judiciary Committee how Rule
68(b)(1) was intended to work. Representative Porter said that
the provision would allow attorneys fees to be awarded only when
offers of judgment are made after the parties get discovery:
Consequently, what were saying is that
if this offer is made within a short period
of time, from the ability that you would have
after a case is filed to get discovery, so
you kind of know where youre at, if a short
period of time after that the offer is made,
60 days after that, and you dont accept it,
and when you finally go to trial, the offer
is within 5 percent of less than what you
would have settled for, youve got to pay all
reasonable actual attorneys fees and costs,
from the time the offer was made until the
judgment was entered.[2]
Addressing the same committee again three days later,
Representative Porter cemented this point:
[T]he provision in the offer of judgment
is aimed right after discovery has been
accomplished so that a person has a feel for
how the case is, one way or the other. The
offer of judgments section comes into play
and will certainly induce early settlement.[3
]
The opinion dismisses these statements of legislative
intent, observing that Representative Porters comments do not
convince us that offers made before the parties have made their
initial disclosures are premature.4 This observation misses the
point. Alaskas sliding-scale approach to statutory
interpretation does not require a definitive statement before
legislative history can be used as an aid in construing ambiguous
language. And reliable expressions of legislative intent should
not be ignored when they are useful aids in determining what
ambiguous language means. Here, Representative Porters
description of H.B. 58s intended meaning seems particularly
useful because it comports with his description of the bills
basic purpose: to encourage early settlement by penalizing unwise
decisions made after a party has been fully informed or as
Representative Porter put it, after the party has a feel for how
the case is.
Although it rejects this meaning, todays opinion
advances no sound reason for concluding that a partys uninformed
decision to decline an early offer of judgment should
presumptively be deemed unreasonable, and therefore penalized,
when the uninformed guess turns out to be wrong. The opinions
interpretation of Rule 68(b) seems to run counter to the rules
goal of encouraging reasonable action. A rule that pushes
parties toward uninformed choice encourages unreasonable action
and simply invites abuse.
In defense of its interpretation, the opinion points to
two problems that, in the courts view, weigh against the
interpretation favored by legislative history and policy. First,
the opinion reasons, if Rule 68(b)(1) were construed literally
to require that both parties make their original disclosures
before penalties could attach for rejecting an offer, then the
purposes of the rule could be subverted, because a party failing
to make the required disclosure could purposefully or
unintentionally interfere with the offer process by failing to
make an initial disclosure.5 But this reasoning describes a
problem that will never arise. A party facing an offer of
judgment from an opponent that has made a timely disclosure could
never assert its own breach of the deadline as an excuse for
rejecting the offer, since the offerees failure to disclose would
never impair its ability to make an informed decision. Civil
Rule 94 allows flexibility to depart from the strict terms of a
rule in the interest of justice. In this situation, a non-
complying offeree could hardly claim that the interest of justice
would be advanced by allowing its own breach to prevent Rule
68(b) from applying.
Second, the opinion reasons, Rule 68(a) militates
against Representative Porters interpretation of Rule 68(b)
because such an interpretation would conflict with the first
sentence of Rule 68(a), which permits offers to be made [a]t any
time more than 10 days before the trial begins. 6 But this
argument overlooks the two distinct purposes served by
subsections 68(a) and 68(b).
In contrast to subsection 68(b), which penalizes
unreasonable responses to offers of judgment, subsection 68(a),
simply defines the basic framework for a valid and binding offer
of judgment: it allows either party to make an offer at any time,
requires the offer to remain open ten days, specifies what the
opposing party needs to do to accept it, and describes how to
convert the accepted offer into a judgment.7 Nothing in this
subsection implies that any penalty necessarily will, or
routinely should, flow from rejecting an offer; it merely adopts
a uniform, enforceable, and generally applicable early settlement
process a framework that is useful and necessary regardless of
whether penalties are imposed for unreasonably rejecting offers
of judgment. Hence no conflict exists between subsections 68(a)
and (b): the fact that subsection 68(b) prescribes sanctions for
a limited universe of unreasonably rejected offers has no bearing
on the validity or utility of subsection 68(a)s procedures
enabling parties to make and accept offers at any time.
In keeping with H.B. 58s intended meaning and purpose,
then, I would interpret subsection 68(b)(1)s provisions as
triggering penalties only after both parties have made their
initial disclosures (or after the deadline for initial
disclosures has expired). As to all other issues, I join in the
courts opinion.
_______________________________
1 The company is also identified in the record as Yukon
Title Company.
2 Crosby v. Hummell, 63 P.3d 1022, 1027 (Alaska 2003).
3 Id.
4 McHugh v. Church, 583 P.2d 210, 216 (Alaska 1978).
5 Rosenberg v. Smidt, 727 P.2d 778, 783 (Alaska 1986);
see also McHugh, 583 P.2d at 216; Semlek v. Natl Bank of Alaska,
458 P.2d 1003, 1006 (Alaska 1969).
6 AS 34.20.070(b) states:
Not less than 30 days after the default and
not less than three months before the sale
the trustee shall record in the office of the
recorder of the recording district in which
the trust property is located a notice of
default setting out (1) the name of the
trustor, (2) the book and page where the
trust deed is recorded, (3) a description of
the trust property, including the propertys
street address if there is a street address
for the property, (4) a statement that a
breach of the obligation for which the deed
of trust is security has occurred, (5) the
nature of the breach, (6) the sum owing on
the obligation, (7) the election by the
trustee to sell the property to satisfy the
obligation, and (8) the date, time, and place
of the sale. An inaccuracy in the street
address may not be used to set aside a sale
if the legal description is correct. At any
time before the sale, if the default has
arisen by failure to make payments required
by the trust deed, the default may be cured
by payment of the sum in default other than
the principal which would not then be due if
no default had occurred, plus attorney fees
or court costs actually incurred by the
trustee due to the default. If under the
same trust deed notice of default under this
subsection has been recorded two or more
times previously and the default has been
cured under this subsection, the trustee may
elect to refuse payment and continue the
sale.
7 Id. The amount of the offset bid is the sum owing on
the obligation as of the time of publication of notice, plus
interest, costs, and expenses, including reasonable attorneys
fees, incurred by the beneficiary until the time of sale.
8 Id.
9 The parties dispute whether the deed of trust and
notice of default provided such notice. Cook argues that the
term time of sale did not necessarily refer to the auction. We
do not read the deed of trust and the notice to encourage
prospective bidders to think that they would not be required to
pay cash at the auction.
10 Mackie v. Chizmar, 965 P.2d 1202, 1204 (Alaska 1998)
(quoting Jaso v. McCarthy, 923 P.2d 795, 801 (Alaska 1996)).
11 Kellis v. Crites, 20 P.3d 1112, 1113 (Alaska 2001).
12 Fernandes v. Portwine, 56 P.3d 1, 8 (Alaska 2002).
13 Alaska R. Civ. P. 68(b)(1).
14 Alaska R. Civ. P. 68(b)(2)-(3).
15 Alaska R. Civ. P. 68(a) (emphasis added).
16 See Farr v. Stepp, 788 P.2d 35, 37 (Alaska 1990)
(holding that Rule 68 does not preclude making offer of judgment
while motion to amend pleading is pending).
17 Because Cook advances this legislative history argument
for the first time in its petition for rehearing, Appellate Rule
506(a) would normally call for its rejection as a basis for
rehearing. Watts v. Seward Sch. Bd., 423 P.2d 678, 679 (Alaska
1967) (interpreting Supreme Court Rule 35, predecessor to current
Appellate Rule 506(a)). But we choose to consider the argument
because the Rule 68(b)(1) prematurity issue may recur. Further,
the issue does not require us to consider disputed facts, and
presents only a question of law which can be resolved by
consideration of the words of the underlying statute, its
legislative history, and the text of the corresponding Civil
Rule.
18 The court nonetheless asks the Standing Committee on
Civil Rules to consider whether Civil Rule 68(b) should be
amended to clarify the offer of judgment procedure, to consider
whether it is appropriate to preclude enhanced fee awards as to
successful offers of judgment made before the parties have made
their Rule 26(a) disclosures, and to consider the application of
Rule 68 to cases, such as small claims cases, in which no Rule
26(a) disclosures are required.
19 Farr v. Stepp, 788 P.2d 35, 37 (Alaska 1990).
20 Alaska R. Civ. P. 68(a) (emphasis added).
1 Alaska R. Civ. P. 68(b).
2 H. Jud. Comm. notes, 20th Leg., 1st Sess. (Feb. 21,
1997) (emphasis added).
3 H. Jud. Comm. notes, 20th Leg., 1st Sess. (Feb. 24,
1997) (emphasis added). The same intent was echoed by the bills
sponsor in its senate version, Senator Robin Taylor, who
described it to the Senate Judiciary Committee as requiring the
party who fails to accept an offer of judgment, after a certain
date, to pay actual attorneys fees . . . . S. Jud. Comm. notes,
20th Leg., 1st Sess. (Mar. 12, 1997) (emphasis added).
4 Slip Op. at 13.
5 Slip Op. at 13.
6 Slip Op. at 13.
7 Civil Rule 68(a) provides:
At any time more than 10 days before the
trial begins, either the party making a claim
or the party defending against a claim may
serve upon the adverse party an offer to
allow judgment to be entered in complete
satisfaction of the claim for the money or
property or to the effect specified in the
offer, with costs then accrued. The offer
may not be revoked in the 10 day period
following service of the offer. If within 10
days after service of the offer the adverse
party serves written notice that the offer is
accepted, either party may then file the
offer and notice of acceptance together with
proof of service, and the clerk shall enter
judgment. An offer not accepted within 10
days is considered withdrawn, and evidence of
the offer is not admissible except in a
proceeding to determine costs. The fact that
an offer is made but not accepted does not
preclude a subsequent offer.
