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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jimerson v. Tetlin Native Corporation (09/29/2006) sp-6050
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
| SHIRLEY DAVID JIMERSON and | ) |
| RAMONA DAVID, | ) Supreme Court No. S- 11757 |
| ) | |
| Appellants, | ) |
| ) Superior Court No. | |
| v. | ) 4FA-99-586 CI |
| ) | |
| TETLIN NATIVE CORPORATION, | ) O P I N I O N |
| ) | |
| Appellee. | ) No. 6050 - September 29, 2006 |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Charles R. Pengilly, Judge.
Appearances: Fred W. Triem, Petersburg, for
Appellants. Davis S. Case, Cynthia M. Hora,
Anchorage, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
I. INTRODUCTION
Plaintiffs seek to enforce a settlement agreement. The
superior court determined that the agreement is unenforceable
because the agreements stock repurchase provision violates the
Alaska Native Claims Settlement Acts (ANCSA) prohibition on the
alienation of shares. Because we conclude that transfer of ANCSA
stock back to a Native corporation in exchange for stock in a
newly created corporation violates ANCSA, we affirm.
II. FACTS AND PROCEEDINGS
The Tetlin Native Corporation (TNC) is a village
corporation formed pursuant to ANCSA and organized as an Alaska
business corporation. On July 17, 1996, TNC transferred
approximately 643,174 acres of its land to the Tetlin Tribal
Council.1 This left TNC with 100,000 acres of land.
Subsequently, the appellants, Shirley Jimerson and
Ramona David, conducted a campaign to recall TNCs board of
directors. The campaign was successful, and on January 12, 1999,
Jimerson and David were elected to the board.
On March 15, 1999, TNC and Jimerson and David, as
directors and individual shareholders (collectively Jimerson),2
filed a complaint in Alaska Superior Court in Fairbanks against
certain shareholders and directors of TNC. The complaint alleged
breach of fiduciary duties and wrongful transfer of TNC land, and
requested $257,200,000 in damages and declaratory and injunctive
relief. On April 20, 1999, the case was removed to the United
States District Court for the District of Alaska.
On August 6, 1999, the Jimerson board was recalled.
The new board passed a resolution that TNC dismiss all law suits
brought by the Jimerson board. On October 6, 1999, TNC moved to
dismiss without prejudice all claims it had against the
shareholders and former and current directors of TNC. The
district court denied TNCs motion to dismiss and urged the
parties to reach a settlement.
The courts advice bore fruit, and the parties reached a
settlement agreement. In August 2001 the district court approved
the agreement and entered judgment on it.3 The settlement
agreement acknowledged that TNC shareholders may not have been
fully informed regarding dissenters rights in the 1996 land
transfer and provided for
[a] transfer of a portion of Tetlin Native
Corporations remaining lands . . . to a new
corporation to be formed by dissenting
shareholders . . . who elect to transfer
their shares of Tetlin Native Corporation
ANCSA stock back to the corporation in
exchange for shares in the new corporation.
In May 2003 Jimerson filed a motion in district court
to enforce the settlement agreement. TNC opposed the motion and
moved for relief from the judgment, contending that the district
court lacked subject-matter jurisdiction. The district court
concluded that the case presented no substantial federal question
and declared the judgment based on the settlement agreement void
for lack of jurisdiction. The case was then remanded to the
superior court.
On February 23, 2004, Jimerson filed a motion in the
superior court to enforce the settlement agreement. TNC opposed
the motion, arguing that the settlement agreement was
unenforceable as against public policy for three reasons: (1) the
agreement provided for an exchange of shares in violation of
ANCSAs prohibition on alienation, (2) the agreement violated the
Alaska Corporations Code, and (3) the attorney for plaintiffs had
a conflict of interest.
On June 18, 2004, the superior court denied Jimersons
motion to enforce the settlement agreement on the grounds that
the agreement was unenforceable because it violated ANCSAs
prohibition on alienation.4
Jimerson appeals this denial.
III. DISCUSSION
We have adopted the Restatement principle that [a]
promise or other term of an agreement is unenforceable on grounds
of public policy if legislation provides that it is unenforceable
. . . .5 This court has no power, either in law or in equity, to
enforce an agreement which directly contravenes a legislative
enactment.6
The issue before this court is whether the transaction
contemplated by the settlement agreement is prohibited by ANCSA.
The settlement agreement transferred a portion of TNCs remaining
land to a new corporation and then allowed dissenting
shareholders to transfer their shares of Tetlin Native
Corporation ANCSA stock back to the corporation in exchange for
shares in the new corporation.
Issues of statutory interpretation are questions of law
which we review de novo.7
ANCSA section 7(h)(1)(B) prohibits ANCSA stock from
being sold, pledged, assigned, or otherwise alienated, subject to
exceptions set out in section 7(h)(1)(C).8 ANCSA does not define
the term alienated, and this court has not had occasion to
interpret the term. [U]nless words have acquired a peculiar
meaning, by virtue of statutory definition or judicial
construction, they are to be construed in accordance with their
common usage.9 Blacks Law Dictionary defines alienate: To
transfer or convey (property or a property right) to another.10
Websters defines alienate: to convey or transfer (as property or
a right) [usually] by a specific act rather than the due course
of law.11 The settlement agreement contemplates that dissenting
shareholders transfer their ANCSA shares to TNC. Dissenting
shareholders do not retain any right or interest in their ANCSA
shares. The language of the statute suggests that the term
alienate includes transfer of ANCSA stock back to a village
corporation in exchange for stock in a newly created corporation.
Jimerson argues that the specific prohibitions listed
in subsection 7(h)(1)(B)(i)-(v) do not apply to organic changes
such as the share exchange contemplated in the settlement
agreement. Jimerson argues that under the principle of ejusdem
generis the general term otherwise alienate refers only to the
same kinds of transactions specifically listed in subsection
7(h)(1)(B)(i)-(v) and therefore does not refer to a share
exchange made during an organic change.
We do not find Jimersons argument persuasive for two
reasons. First, Jimerson points to no authority for the
proposition that subsection 7(h)(1)(B)(i)-(v) does not apply to
organic changes. As we discussed above, the language of the
statute suggests that an individual shareholder alienates her
stock by transferring it back to a village corporation in
exchange for stock in another corporation.12 We see no reason why
the same principle would not apply to situations where many or
all shareholders act at once. Whether shares are alienated by a
single shareholder or by many shareholders pursuant to a formal
plan for organic change, there is no indication that Congress
intended to eliminate statutory protections by allowing ANCSA
shareholders to exchange their shares for those of another
corporation. Second, ANCSA provides specific exceptions to the
section 7(h)(1)(B) restrictions. When Congress enumerates
exceptions to a rule, we can infer that no other exceptions
apply. Section 7(h)(1)(C) lists three exceptions that allow
stock to be transferred to a Native or a descendent of a Native:
(1) pursuant to a court decree of separation, divorce, or child
support, (2) if the stock limits the holders ability to practice
his or her profession, or (3) as an inter vivos gift to certain
relatives.13 Section 7(h)(2) permits shares to escheat to the
corporation if the holder has no heirs, and permits a corporation
to repurchase shares transferred by the laws of intestate
succession to a person who is not a Native or descendant of a
Native.14 The transaction contemplated by the settlement
agreement does not fall within any of these exceptions. We
therefore infer that no exception applies for transfer of ANCSA
stock back to a Native corporation in exchange for stock in a
newly created corporation.
Jimerson argues that the legislative history of the
1987 ANCSA amendments shows that section 7(h)(1)(B) does not
prevent holders from transferring shares back to a Native
corporation. While Jimerson argues that allowing holders to sell
their shares back to a Native corporation is not necessarily
inconsistent with the legislative history, she has not shown a
contrary legislative purpose to a plain language interpretation
of the statute.15 The legislative history available is sparse and
equivocal.16 In fact, portions of the legislative history suggest
that a Native corporation does not have the power to repurchase
its own shares.17
The language of section 7(h)(1)(B) indicates that the
transaction contemplated by the settlement agreement violates
ANCSA. That the transaction does not fall within ANCSA
enumerated exceptions confirms this interpretation. Jimerson has
failed to demonstrate through the use of legislative history a
contrary legislative purpose. We therefore hold that the
settlement agreement is unenforceable because it directly
contravenes the section 7(h)(1)(B) restrictions on ANCSA stock.
IV. CONCLUSION
We AFFIRM the superior courts denial of Jimersons
motion for enforcement of the settlement agreement.
_______________________________
1 On January 31, 1996, TNC transferred by quitclaim deed
all 743,174.34 acres it owned to the Tetlin Tribal Council for
ten dollars. This deed was never recorded. The July 17, 1996
deed was recorded and is the land transfer referred to in this
case.
2 Flora Joe was also a named plaintiff. She is not
participating in this appeal.
3 After the district court approved the settlement
agreement, TNC expressed concern about the calculation of
attorneys fees, and a third party moved to intervene on the basis
of his interest in a land claim before the tribal council. On
June 24, 2002, the court entered an amended judgment upon the
settlement dealing with these issues. The amended judgment did
not alter the portion of the settlement agreement relevant to our
disposition of this case.
4 The court also concluded that the attorney representing
both Jimerson and TNC had a conflict of interest and that this
conflict provided alternative grounds for finding the agreement
unenforceable. Because we affirm on the ANCSA issue, we do not
consider whether there was a conflict of interest or whether the
agreement violated the Alaska Corporations Code.
5 Pavone v. Pavone, 860 P.2d 1228, 1231 (Alaska 1993)
(adopting the Restatement (Second) of Contracts 178(1) (1981)).
6 Id.
7 Kodiak Island Borough v. Roe, 63 P.3d 1009, 1012 n.6
(Alaska 2003) (citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979)).
8 43 U.S.C. 1606(h)(1)(B), (C). These sections provide:
(B) Except as otherwise provided in this
subsection, Settlement Common Stock, inchoate
rights thereto, and rights to dividends or
distributions declared with respect thereto
shall not be--
(i) sold;
(ii) pledged;
(iii) subjected to a lien or judgment
execution;
(iv) assigned in present or future;
(v) treated as an asset under--
(I) Title 11 or any successor
statute,
(II) any other insolvency or
moratorium law, or
(III) other laws generally
affecting creditors rights; or
(vi) otherwise alienated.
(C) Notwithstanding the restrictions set
forth in subparagraph (B), Settlement Common
Stock may be transferred to a Native or a
descendant of a Native--
(i) pursuant to a court decree of
separation, divorce, or child support;
(ii) by a holder who is a member of a
professional organization, association, or
board that limits his or her ability to
practice his or her profession because he or
she holds Settlement Common Stock; or
(iii) as an inter vivos gift from a
holder to his or her child, grandchild,
great-grandchild, niece, nephew, or (if the
holder has reached the age of majority as
defined by the laws of the State of Alaska)
brother or sister, notwithstanding an
adoption, relinquishment, or termination of
parental rights that may have altered or
severed the legal relationship between the
gift donor and recipient.
9 Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746
P.2d 896, 905 (Alaska 1987); accord Williams v. Taylor, 529 U.S.
420, 431 (2000) (We give the words of a statute their ordinary,
contemporary, common meaning, absent an indication Congress
intended them to bear some different import.) (citations
omitted).
10 Blacks Law Dictionary 80 (8th ed. 2004).
11 Merriam Websters Collegiate Dictionary 28 (10th ed.
1998).
12 See supra p. 6.
13 43 U.S.C. 1606(h)(1)(C).
14 43 U.S.C. 1606(h)(2) provides as follows:
(A) Upon the death of a holder of
Settlement Common Stock, ownership of such
stock (unless canceled in accordance with
subsection (g)(1)(B)(iii) of this section)
shall be transferred in accordance with the
lawful will of such holder or pursuant to
applicable laws of intestate succession. If
the holder fails to dispose of his or her
stock by will and has no heirs under
applicable laws of intestate succession, the
stock shall escheat to the issuing Regional
Corporation and be canceled.
(B) The issuing Regional Corporation
shall have the right to purchase at fair
value Settlement Common Stock transferred
pursuant to applicable laws of intestate
succession to a person not a Native or a
descendant of a Native after February 3,
1988, if--
(i) the corporation--
(I) amends its articles of
incorporation to authorize such
purchases, and
(II) gives the person receiving
such stock written notice of its
intent to purchase within ninety
days after the date that the
corporation either determines the
decedent's heirs in accordance with
the laws of the State or receives
notice that such heirs have been
determined, whichever later occurs;
and
(ii) the person receiving such stock
fails to transfer the stock pursuant to
paragraph (1)(C)(iii) within sixty days after
receiving such written notice.
(C) Settlement Common Stock of a
Regional Corporation--
(i) transferred by will or pursuant to
applicable laws of intestate succession after
February 3, 1988, or
(ii) transferred by any means prior to
February 3, 1988, to a person not a Native or
a descendant of a Native shall not carry
voting rights. If at a later date such stock
is lawfully transferred to a Native or a
descendant of a Native, voting rights shall
be automatically restored.
15 Cf. Muller v. BP Exploration (Alaska) Inc., 923 P.2d
783, 788 (Alaska 1996) (applying plain meaning absent convincing
evidence of a contrary legislative purpose).
16 Our focus on textual analysis in construing acts of
Congress is supported by the United States Supreme Courts recent
expressions of doubt as to the utility of legislative history in
statutory interpretation. See City of Rancho Palos Verdes, Cal.
v. Abrams, 544 U.S. 113, 122 (2005) (looking only to the text and
its express or implicit indications for guidance).
17 In discussing this specific grant of the right to
repurchase stock, the Senate Report explains that the power [to
repurchase stock] only exists if the corporation is the issuing
corporation and has suitably amended its articles of
incorporation. S. Rep. No. 100-201, at 28 (1987), as reprinted
in 1987 U.S.C.C.A.N. 3269, 3278. This suggests a legislative
intent to grant a Native corporation the power to repurchase
shares only in special circumstances and where procedural
requirements have been met.
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