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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
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
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
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,
Judge.
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.
I. INTRODUCTION
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.
II. FACTS AND PROCEEDINGS
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.
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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.
III. STANDARD OF REVIEW
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
IV. DISCUSSION
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).
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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.
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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).
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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).
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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).
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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).
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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).
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V. CONCLUSION
We AFFIRM the superior court's decision.
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