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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Roberson v. Southwood Manor Associates, LLC (4/8/2011) sp-6548

Roberson v. Southwood Manor Associates, LLC (4/8/2011) sp-6548, 249 P3d 1059

        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,   email 


DIANE ROBERSON, on behalf of                        ) 
herself and all others similarly situated,          )    Supreme Court No. S-13659 
                        Petitioner,                 )    Superior Court No. 3AN-08-08669 CI 
        v.                                          )    O P I N I O N 
SOUTHWOOD MANOR                                     )    No. 6548 - April 8, 2011 
ASSOCIATES, LLC,                                    ) 
                        Respondent.                 ) 

                Petition for Review from the Superior Court of the State of 
                Alaska, Third Judicial District, Anchorage, Patrick J. McKay, 

                Appearances:       James J. Davis, Jr., Goriune Dudukgian, and 
                Ryan     Fortson,    Northern     Justice   Project,   Anchorage,     for 
                Petitioner. David Karl Gross, Birch Horton Bittner & Cherot, 
                Anchorage, for Respondent. 

                Before:      Carpeneti,      Chief   Justice,   Fabe,    Winfree,    and 
                Stowers,   Justices.   [Christen, Justice, not participating.] 

                WINFREE, Justice. 


                A mobile home park tenant accrued late charges for failing to pay her space 

rent on time.  The park owner sued the tenant for back rent and late charges.  The tenant 

filed class action counterclaims. One counterclaim asserted that the late charges violated 

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Alaska's Unfair Trade Practices and Consumer Protection Act (UTPA).                     The superior 

court granted a motion to dismiss the tenant's UTPA counterclaim, concluding that the 

UTPA does not apply to residential leases.  We granted the tenant's petition for review 

to consider this question of law, and we now affirm the superior court's decision. 


                Southwood   Manor   Associates,   LLC (Southwood)   owns  and   operates   a 

mobile home park in Anchorage.           Diane Roberson was a tenant at the park - renting 

space, not a mobile home - from September 1997 to August 2008. Roberson's rent was 

between $385 and $400 per month.  Roberson's lease agreement also provided that she 

would pay "a late charge of Fifty Dollars ($50.00) for each month's rent that is paid more 

than FIVE (5) DAYS after it falls due" and "Three Dollars ($3.00) per day after the 

initial charge until the rental is paid in full."  (Emphasis in original.) 

                Roberson was late with rent payments and she accrued late charges during 

her tenancy. Southwood filed a complaint against Roberson seeking eviction, back rent, 

late   charges,    and   other   damages.      Roberson      filed  an   answer    and   class   action 
counterclaims alleging in part that the late charges violated the UTPA.1  Roberson sought 

a declaration that Southwood's late charges were illegal, an injunction, and damages. 

                Southwood moved to dismiss Roberson's UTPA counterclaim for failure 

to   state   a   claim   on   which   relief   could   be   granted,   and   Roberson  moved   for   partial 

summary judgment to establish the validity of her UTPA counterclaim.                    The superior 

court granted Southwood's motion to dismiss and denied Roberson's motion for partial 

summary   judgment.        The   court   held   that   based   on   both   the   plain   language   of   AS 

        1       AS 45.50.471-.561. 

                                                  -2-                                              6548 

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45.50.471 and this court's decision in State v. First National Bank of Anchorage,2 the 

UTPA does not apply to residential leases.   The superior court concluded that "it is not 

this Court's role to adopt [Roberson's] arguments by interpreting a clearly written statute 

in a manner inconsistent with the Legislature's intent." 

              We granted Roberson's petition for review to decide whether AS 45.50.471 

applies to residential leases. 

              We review de novo a superior court's decision to grant a motion to dismiss.3 

"Because motions to dismiss are disfavored, '[a] complaint should not be dismissed for 

failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set 
of facts that would entitle him or her to relief.' "4    Issues of statutory interpretation 

present questions of law warranting independent review.5       We "adopt[] the rule of law 

that is most persuasive in light of precedent, reason, and policy."6 


              Alaska Statute 45.50.471(a) states that "[u]nfair methods of competition and 

unfair or deceptive acts or practices in the conduct of trade or commerce are declared to 

       2      660 P.2d 406, 414 (Alaska 1982) (holding UTPA does not apply to real 

property sales). 

       3      Adkins v. Stansel, 204 P.3d 1031, 1033 (Alaska 2009) (quoting Varilek v. 

City of Houston, 104 P.3d 849, 851 (Alaska 2004)). 

       4      Id. (quoting Catholic Bishop of N. Alaska v. Does 1-6, 141 P.3d 719, 722 

(Alaska 2006)). 

       5       W. Star Trucks, Inc. v. Big Iron Equip. Serv., Inc., 101 P.3d 1047, 1048 

(Alaska 2004) (citing In re Life Ins. Co. of Alaska, 76 P.3d 366, 368 (Alaska 2003)). 

       6      Id. (citing In re Life Ins. Co. of Alaska, 76 P.3d at 368). 

                                             -3-                                       6548

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be   unlawful."     Alaska   Statute   45.50.471(b)   provides   a   non-exclusive   list   of   acts   or 
practices   that   are   unfair   or   deceptive.7 The   list   does   not   mention   disputes   between 

landlords and tenants.8       We therefore start with a review of our cases touching on the 

UTPA's application to real estate transactions. 

                In First National Bank we held that "the sale of real property is not within 
the regulatory scope of the [UTPA]."9   In reaching our decision we observed that "the 

entire thrust of the [UTPA] is directed at regulating practices relating to transactions 
involving consumer goods and services."10  We further explained that "[w]hile subsection 

(b) makes clear that this list is not exclusive, none of the enumerated prohibited acts 

mentions real property.        Nor do any other provisions of the [UTPA] suggest that the 
legislature intended the sale of real property to come within the [UTPA's] purview."11 

We discussed relevant parts of our First National Bank holding on three later occasions. 

                In Barber v. National Bank of Alaska we held that the UTPA did not apply 
to mortgages.12  There the bank initiated non-judicial foreclosure proceedings on Barber's 

residential property after he failed to make mortgage payments.13                Barber sued the bank 

and   one   of   its   employees,   alleging   a   UTPA   violation   for   failure   to   postpone   the 

        7       When Southwood filed suit, subsection (b) contained a non-exclusive list 

of 51 prohibited practices.  Former AS 45.50.471(b) (2008). 

        8       See former AS 45.50.471(b)(1)-(51) (2008). 

        9       660 P.2d at 414. 

        10      Id. at 412. 

        11      Id. at 413. 

        12       815 P.2d 857, 861 (Alaska 1991). 

        13      Id. at 859-60, 863. 

                                                   -4-                                              6548

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foreclosure   sale   and   for   certain   misstatements   the   employee   made   concerning   the 
foreclosure proceedings.14  We explained that in First National Bank we "held that the 

sale   of   real   property   is   not   governed   by   the   [UTPA]."15 Because   we   determined   a 

mortgage is more akin to a real property sale than a good or service, we held that the 
UTPA did not apply to Barber's mortgage as a matter of law.16 

                In Aloha Lumber Corp. v. University of Alaska we held that the UTPA did 

not apply to the sale of standing timber because timber is real property, not a consumer 
good.17   In that case Aloha Lumber challenged the University's sale of timber to a third 

party as unfair and anti-competitive in violation of the UTPA.18  We noted First National 

Bank's holding that the UTPA's thrust "is directed at regulating practices relating to 
transactions involving consumer goods and services."19               We determined that standing 

timber is not a consumer good because "[c]onsumer goods are generally understood to 

mean   goods   'used   or   bought   for   use   primarily   for   personal,   family,   or   household 
purposes.' "20 

        14      Id. at 860. 

        15      Id. at 861 (citing First Nat'l Bank, 660 P.2d at 413). 

        16      Id.  We also rejected Barber's alternative UTPA argument, that the bank 

primarily engaged in "debt collection services."  Id. at 861 (citingFirst Nat'l Bank, 660 
P.2d at 413). 

        17      994 P.2d 991, 1002 (Alaska 1999). 

        18      Id. at 994-95, 1002. 

        19      Id. at 1002 (quoting First Nat'l Bank, 660 P.2d at 412). 

        20      Id. (quoting AS 45.09.109). 

                                                   -5-                                            6548

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                In Western Star Trucks, Inc. v. Big Iron Equipment Service, Inc. we held 
that   the  UTPA      governs    business-to-business  transactions.21         A   commercial      truck 

manufacturer misrepresented the consequences of an oral agreement it made with a parts 
and service dealer.22  The dealer sued under the UTPA.23           Distinguishing the commercial 

transactions in First National Bank  and Aloha Lumber, we explained that "sales and 

services involving real estate [are distinct] from those involving other property and 

services"   and   that   "real   estate   transactions   were   not   intended   to be   covered   by   the 
[UTPA]."24      We stated "First National Bank  and Aloha Lumber  clearly hold that the 

[UTPA] does not apply to transactions involving real estate."25 

                Our cases reflect that the relevant distinction inFirst National Bank was not 

between real property sales and other transactions involving real property, but rather 

between real property transactions and non-real property transactions, specifically those 
involving   consumer  goods.26         Southwood   argues   that   a   residential   lease   should   be 

considered a real property transaction - and therefore outside the UTPA's scope based 

        21      101 P.3d at 1047-48. 

        22      Id. at 1047. 

        23      Id. at 1048. 

        24      Id. at 1051, 1052. 

        25      Id. at 1052. 

        26      See Aloha Lumber, 994 P.2d at 1002 (agreeing with superior court that 

"because standing timber is not a 'consumer good,' but real property, the timber sales at 
issue are beyond the scope of the [UTPA]").              And as we explained in First National 
Bank, "consumer" status is not contingent upon whether an individual buys or leases. 
660 P.2d at 413-14 (quoting former AS 45.50.561(6) (1982)) (current version at AS 
45.50.561(a)(4)) (noting that "consumer" is statutorily defined as "a person who seeks 
or acquires goods or services by lease or purchase") (emphasis omitted). 

                                                   -6-                                            6548

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on First National Bank - because a residential lease is functionally equivalent to a real 

property sale.   Roberson disagrees, arguing the UTPA should apply to residential leases 

because a modern tenant does not have a real property interest, but rather is a consumer 

of housing services.       According to Roberson, "American jurisprudence has come to 

recognize that the traditional notions of landlord-tenant relations . . . are outdated when 

it comes to modern landlord-tenant transactions" and "[t]his trend has led most courts 

around the country to hold that residential landlords are covered by state consumer 

protection laws, just like any other provider of consumer services." 

                But Roberson's authority, read in context, does not provide much guidance 

for interpreting a consumer protection statute such as the UTPA. The primary cases cited 
concern whether an implied warranty of habitability should be recognized.27  Roberson 

goes on to discuss cases from other states where the courts specifically held that the 

consumer   protection   statutes   apply   to   residential   leases,   but   those   cases   are   also 

distinguishable because those states' consumer protection statutes specifically include 
real property, and the UTPA does not.28 

                Southwood's argument is more persuasive. Real property leases are similar 

to real property sales in significant ways.         Perhaps most importantly, leases generally 

include a transfer of an interest: 

                In every lease, the property interests . . . are shared between 
                the    landlord   and   the   tenant.     The   landlord    retains   the 
                ownership of the property as a future interest in the form of 

        27      See Javins v. First Nat'l Realty Corp., 428 F.2d 1071, 1072-73 (D.C. Cir. 

1970); Green v. Superior Court, 517 P.2d 1168, 1170 (Cal. 1974). 

        28      See W. Star Trucks, 101 P.3d at 1052 (citing First Nat'l Bank, 660 P.2d at 

413 n.14) ("[T]he acts of several states involving deceptive merchandising practices 
specifically     included     real   estate   whereas     the   [UTPA]      does    not.");  see    also 
AS 45.50.471(b). 

                                                  -7-                                             6548

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                 a   reversion.     The    tenant   obtains   the   present   possessory 
                 interest in the leased property for the duration of the lease.[29] 

Because the UTPA does not apply to real property transactions, and a lease is a real 

property transaction because it contains a transfer of the property's interest, the statute 
does not apply to residential leases.30 

                 Two legislative actions buttress our conclusion.              First, we note that the 

legislature changed the UTPA after our decision in First National Bank. When that case 

was   decided,   AS   45.50.471(b)   listed   25 prohibited   acts   or   practices   covered   by   the 
UTPA;31 the legislature has since expanded the list significantly.32                  For example the 

legislature added subsection .471(b)(52) in 2007, which prohibits a variety of unfair 

        29       4 THOMPSON ON REAL PROPERTY  39.01, at 558 (David A. Thomas ed., 

2004); see 2 RICHARD R. POWELL, POWELL ON REAL PROPERTY  16.02[3][a], at 16-13 
(Michael Allan Wolf ed., 2009) ("A lease transfers an 'estate' to the tenant, which gives 
the tenant a 'possessory' interest in the premises." (citations omitted)); see also Thomas, 
above,  39.02(a), at 561 ("[A] lease creates an interest in land."). 

                 We   have   also   recognized   that   a   lease   typically   conveys   an   interest   in 
property.    See N. Alaska Envtl. Ctr. v. State, Dep't of Natural Res., 2 P.3d 629, 636 
(Alaska 2000) (quoting BLACK'S LAW DICTIONARY 615 (abr. 6th ed. 1990)); see also 
Schaible v. Fairbanks Med. & Surgical Clinic, Inc., 531 P.2d 1252, 1262 (Alaska 1975) 
(Connor, J., dissenting) (citing Smalley v. Juneau Clinic Bldg. Corp., 493 P.2d 1296, 
1299 (Alaska 1972)) ("In Alaska a lease is a conveyance of an interest in real property."). 

        30       By clarifying that a transfer in interest is required to be considered a real 

property     transaction,    we    ameliorate    Roberson's      concern     that  a  broad    reading    of 
"transactions involving real property" would preclude a UTPA claim for such deceptive 
practices   as   a   "home   construction   scam,"   because   such   practices   do   not   involve   an 
interest transfer. 

        31      First Nat'l Bank, 660 P.2d at 412-13. 

        32       The list contained 51 prohibited acts or practices when Southwood first 

filed   its   complaint.   Former   AS   45.50.471(b)   (2008).          The   list   now   extends   to   57 
prohibited acts or practices.   AS 45.50.471(b). 

                                                    -8-                                              6548

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mortgage lending activities.33   By adding subsection (b)(52), the legislature responded 

to our holding in Barber and chose to include certain mortgage practices within the 

UTPA.       But   unlike   in   the   mortgage   context,   the   legislature   has   not   amended   AS 

45.50.471(b) to include real estate transactions - including residential leases - despite 

our clear statement in Western Star Trucks that real estate transactions fall outside the 

UTPA's scope. 

                Second, our interpretation of the UTPA is informed by the legislature's 
creation    of  the  Uniform    Residential    Landlord    and   Tenant   Act   (URLTA).34      The 

URLTA's purpose is to "simplify, clarify, modernize, and revise the law governing the 
rental of dwelling units and the rights and obligations of landlord and tenant."35                In 

achieving this purpose, the legislature specifically regulates mobile home park leases.36 

Although we do not need to decide whether the URLTA sufficiently regulates landlord 
tenant relationships to exempt residential leases from the UTPA,37 the existence of the 

URLTA is consistent with our interpretation that the legislature did not intend to include 

real estate transactions within the scope of the UTPA. 

       33       Ch. 50,  2, SLA 2007.   Subsection .471(b)(52) makes it a violation of the 

UTPA to engage in any act or practice prohibited in the Mortgage Lending Regulation 
Act.  See AS 06.60.340. 

       34      See AS 34.03.010-.380. 

       35      AS 34.03.010(b)(1). 

       36      AS 34.03.040(c). 

       37      See AS 45.50.481(a) (stating UTPA does not apply to "an act or transaction 

regulated under laws administered by the state . . . unless the law regulating the act or 
transaction does not prohibit the practices declared unlawful" in UTPA). 

                                                 -9-                                           6548

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            We AFFIRM the superior court's decision. 

                                      -10-                                 6548
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