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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Tagaban v. City of Pelican (9/18/2015) sp-7049

Tagaban v. City of Pelican (9/18/2015) sp-7049

         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  



CLIFFORD W. TAGABAN,                                    )  

                                                        )         Supreme   Court   Nos.   S-15014/15253  

                            Appellant,                  )         (Consolidated)  


         v.                                             )         Superior Court No. 1PE-11-00056 CI  


CITY OF PELICAN,                                        )         O P I N I O N  


                            Appellee.                   )         No. 7049 - September 18, 2015  


                   Appeal from the Superior Court of the State of Alaska, First  


                   Judicial District, Petersburg, William B. Carey, Judge.  

                   Appearances:    Fred  W.  Triem,  Petersburg,  for  Appellant.  

                   Vance   A.   Sanders   and   Margot   Knuth,   Law   Office   of  

                   Vance  A.  Sanders,  LLC,  Douglas,  for  Appellee.  Aesha  

                   Pallesen,   Assistant   Attorney   General,   Anchorage,   and  

                   Craig W. Richards, Attorney General, Juneau, for Amicus  


                   Curiae State of Alaska.  

                   Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                   Bolger, Justices.  

                   FABE, Chief Justice.  


                   This  appeal  involves  a  claim  by  Clifford  W.  Tagaban  that  the  City  of  


Pelican foreclosed upon parcels of land against which he had a judicial lien without  


giving him proper notice.  In 1998 Tagaban was awarded a judgment against the Kake  


Tribal Corporation, and the next year he recorded this judgment as a ten-year lien against  


----------------------- Page 2-----------------------

parcels  of  property  the  Corporation  owned.  Tagaban  requested   and  received  lien  

extensions from the superior court in 2008 and 2009, though he did not record the second  


lien  extension  until  2012.            The  City  foreclosed  upon  the  parcels  in  August  2010.  

Although the City's counsel notified Tagaban's counsel of the foreclosure via email in  


October 2010, eleven months before the redemption period ended, Tagaban filed suit to  


challenge the City's lack of formal foreclosure and redemption notice to him as well as  

the constitutionality of Alaska's foreclosure and redemption notice statutes.   

                   The superior court granted summary judgment to the City on all issues and  


awarded attorney's fees to the City under both Alaska Rules of Civil Procedure 68 and  


82.  Because AS 29.45.330 only requires foreclosure notice to property owners and this  

statute meets constitutional due process requirements, Tagaban - as a lienholder and not  


a property owner - was not due foreclosure notice by the City.  As a lienholder Tagaban  


could have requested pre-foreclosure notice under AS 29.45.350, but he did not.  And  

because Tagaban did not record the second lien extension until after the redemption  

period ended, we affirm the superior court's conclusion that the City was not required  

to issue redemption notice to him under AS 29.45.440 because he was not a lienholder  

of record when notice of the expiration of the redemption period was due.  We also  


affirm the superior court's award of Rule 68 attorney's fees but vacate its award of fees  

under Rule 82.  


         A.        Facts  

                   Tagaban served as a representative for a class that filed suit against the  



                                             The   class,   composed   of   Kake   shareholders   ("the  

Kake   Tribal   Corporation.  

Hanson-Tagaban class"), won a judgment against the Corporation in June 1998.  In  

          1        See Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1323 (Alaska 1997).  

                                                           -2-                                                        7049  

----------------------- Page 3-----------------------


July 1999 Tagaban's counsel recorded the judgment in the Sitka Recording District.   At  


that  time,  the  Corporation  owned  certain  property  in  the  City  of  Pelican.                                                                The  


Corporation went into bankruptcy from 1999 to 2002  and sold property to the Ed Bahrt 

Management Company in 2008.  The Hanson-Tagaban class attempted to execute its  


judgment against the Corporation in 2009. The superior court entered an order allowing  


execution in May 2009 but vacated that order in July.  The Corporation still owes the  

Hanson-Tagaban class approximately $1.2 million.  


                        Superior courts purported to extend Tagaban's lien twice.  First, Superior  

Court Judge Michael A. Thompson extended it in 2008 for a period of three years, until  


June 2011.  Tagaban promptly recorded this first extension.  Second, when he vacated  


the execution order in July 2009, Superior Court Judge Trevor Stephens also ruled that  


"the running of the ten-year life of plaintiffs' judgment liens as defined in AS 09.30.010  


is tolled during any period within which Kake Tribal Corporation's pending bankruptcy  


or Chapter 11 Reorganization Plan has impaired the plaintiffs' ability to execute on their  


judgment liens."  Tagaban did not record this second lien extension until January 2012.  


                        In May 2010 the City of Pelican published a foreclosure list demanding  


payment of delinquent property taxes.  The foreclosure list included the parcels of land  


owned by the Ed Bahrt Management Company and subject to the Hanson-Tagaban class  


lien.  Roughly $17,000 of the City's unpaid taxes were for real property taxes from 2008  


and 2009 plus interest.  The City asserted that greater amounts were also due for other  


alleged  indebtedness,  including  delinquent  personal  property  taxes  and  sales  taxes,  

            2           A  recorded  judgment  becomes  a  ten-year  lien  upon  the  debtor's  real  

property located in the recording district.  See AS 09.30.010.  

            3           The bankruptcy court recognized the Hanson-Tagaban class's claim as a   

 $ 1,106,980.74 secured-judgment lien claim.  The final decree closing the Corporation's                       

bankruptcy case was entered in January 2004.  

                                                                           -3-                                                                     7049

----------------------- Page 4-----------------------

bringing the total due to roughly $31,000.  In August 2010 the City filed a petition to  

foreclose its tax liens on the property.  


                   After the court entered a judgment of foreclosure Tagaban's counsel, Fred  


Triem, inquired about the status of the property.  The City's attorney informed Triem in  


an October 4, 2010 email that "Pelican's tax lien was for $31,175.51" and that "[t]he  

Foreclosure  List  was  published  in  three  prominent  places  in  Pelican  for  thirty  days  

beginning on May 14, 2010.  It was properly served on the property owner, Edward  

Bahrt and Associates LLC."  The email ended with "I hope this is what you needed."  

                    In July 2011 the Pelican City Clerk issued a notice that the period of time  


within which the parcels could be redeemed would expire in September 2011.  The City  


did   not   give   direct   notice   of   the   expiration   of   the   redemption   period   to   the  

Hanson-Tagaban class or to Tagaban individually.  


          B.        Proceedings  


                    Tagaban filed suit in March 2012 to challenge the City's foreclosure on the  


property in which he claimed an interest.   Tagaban challenged the City's lack of formal  


notice of foreclosure and expiration of the redemption period to him as a lienholder.  He  

also  challenged  the  constitutionality  of  Alaska's  foreclosure  and  redemption  notice  

          4         Tagaban originally filed this case in his capacity as a representative of the  

class of Kake Tribal Corporation shareholders who   had won a judgment against the  

Corporation.  The original complaint  was  dismissed without  prejudice; the superior court  

found that if the Hanson-Tagaban  class  was to be a party in the present case, it would  

have to be re-certified pursuant to Rule 23.  The superior court explained that because  

the  City  of  Pelican  was  not  party  to  the  previous  cases  against  the  Kake  Tribal  

Corporation, it had "no chance to address the class certification" or "to challenge the  


judgment that was entered against [the Corporation]."  The superior court noted that  

Tagaban "or other interested parties are free to bring a new action, individually or as a  


class."  Tagaban then brought this case in his individual capacity, as a single member of  


the  class  of  shareholders  who  hold  a  single  judgment  against  the  Kake  Tribal  

Corporation.  We do not now review the superior court's previous dismissal.  

                                                             -4-                                                      7049

----------------------- Page 5-----------------------

statutes  on  their  face.    In  May  2012  the  City  made  a  Rule  68  offer  of  judgment  to  


Tagaban for $3,250.   The City asserts that this sum would provide Tagaban "with his  

full share of the class judgment (25 shares at $98 per share) plus $150 for his filing fee  


and  $500  for  attorney's  fees  for  the  preparation  of  the  Plaintiff's  Third  Amended  

Complaint," which was filed by Tagaban solely in his individual capacity.  Tagaban  

rejected this offer.  

                   In May 2012 Tagaban moved for summary judgment, and the City opposed  


and filed a cross-motion for summary judgment in June.  The City challenged the validity  


of the lien extensions. Superior Court Judge William B. Carey denied Tagaban's motion  


and granted the City's motion for summary judgment, concluding that courts do not have  


the authority to extend judgment liens beyond the ten years allowed by statute.  The  

superior court awarded attorney's fees to the City under both Rule 68 and Rule 82.  

                   On appeal Tagaban raises fourteen claims that complain of the City's lack  


of notice to him of the foreclosure and expiration of the redemption period.  He also  


challenges the constitutionality of Alaska's foreclosure and redemption notice statutes.  


Tagaban contends that the lien extensions were valid, asserting that he had an ongoing  


interest in the property so that the City should have provided foreclosure and redemption  


notice to him.  Tagaban also challenges the City's foreclosure and redemption dollar  

value calculations and the superior court's award of attorney's fees.  


                                                                                                      6    In  reviewing  

                   We  review  the  grant  of  summary  judgment  de  novo.     

summary judgment, we read the record in the light most favorable to the non-moving  

          5        Alaska Rule  of Civil Procedure 68(b) provides that litigants that reject  

offers of judgment that are less favorable than the final judgment rendered by the court  

may be required to pay a portion of the offeror's costs and attorney's fees.  

          6        Farmer v. Alaska USA Title Agency, Inc.                   , 336 P.3d 160, 162 (Alaska 2014).  

                                                             -5-                                                       7049

----------------------- Page 6-----------------------


party and take all reasonable inferences in its favor.   We will affirm a grant of summary  


judgment "if the record presents no genuine issue of material fact and if the movant is  


entitled  to  judgment  as  a  matter  of  law."     We  apply  our  independent  judgment  to  


questions of law, "adopting the rule of law most persuasive in light of precedent, reason,  

and policy."9  "Whether a superior court applied the law correctly in awarding attorney's  


fees is a question of law that we review de novo. We apply the independent [de novo]  


standard of review in deciding whether a superior court correctly determined a settlement  

offer's compliance with Rule 68."10  


                   Alaska  Statute  29.45.330  requires  municipalities  to  provide  notice  of  

foreclosure  to  property  owners,  and  AS  29.45.440  requires  municipalities  to  give  


lienholders notice at least 30 days before the redemption period expires for a foreclosed  

property  subject  to  a  lien.    Tagaban's  claims  hinge  on  whether  the  City  was  


constitutionally required to give foreclosure notice to him as a lienholder and whether  

he was a lienholder of record when the City provided notice of the expiration of the  

redemption period, as required by statute.  We examine first Tagaban's pre-foreclosure  


and pre-redemption claims and then turn to his claims challenging the City's calculation  

of the redemption amount and the superior court's award of attorney's fees.  

          7        See Erkins v. Alaska Tr., LLC, 265 P.3d 292, 296 (Alaska 2011).  

          8        Id. (quoting Beegan v. State, Dep't of Transp. & Pub. Facilities , 195 P.3d  

 134, 138 (Alaska 2008)).  

          9        Shaffer v. Bellows, 260 P.3d 1064, 1068 (Alaska 2011) (quoting Smith v.  

Radecki, 238 P.3d 111, 114 (Alaska 2010)).  

          10       Beal v. McGuire ,  216 P.3d   1154,   1162  (Alaska 2009) (footnote omitted).  

                                                           -6-                                                    7049

----------------------- Page 7-----------------------

         A.	      The City's Failure To Provide Written Foreclosure Notice To Tagaban  

                  Did Not Violate His Right to Due Process.  

                  Alaska Statute 29.45.330 requires t  hat,  before  a muni             cipality forecloses on  

a property, it publish  that fact in a local newspaper or, if none is available, in a public  

place, and "mail t  o  the last known owner of each property . . . a notice advising of the  


foreclosure proceeding."             The statute does not require that similar notice be mailed to  


a lienholder of the property, but under AS 29.45.350 a lienholder can request that he  


receive the same notice if a municipality seeks to foreclose the property in which he has  

an interest.   Tagaban  argues  that  AS  29.45.330  violates  the  due  process  clauses  of the  

                           12	  and  the  United  States  Constitution,13  which  he  asserts  require  

Alaska  Constitution                  

written foreclosure notice to all lienholders of record in addition to property owners.  

                  The superior court ruled that AS 29.45.330(a) did not violate Tagaban's due  

process rights.  The superior court  based  this conclusion on an evaluation of due process  


precedent,         which   it   interpreted   to   provide   that   only   reasonably   ascertainable  

interest-holders  must  receive foreclosure notice.  The superior court further concluded  

that  Tagaban's interest  was no         t reasonably ascertainable, and thus that he did not suffer  

         11	      AS 29.45.330(a) (emphasis added).  

         12       The Due Process Clause of the Alaska Constitution reads:  "No  person shall  

be deprived of life, liberty, or property, without due process of law.  The right of all  

persons to fair and just treatment in the course of legislative and executive investigations  


shall not be infringed." Alaska Const. art. I,  7.  

         13       The Due Process Clause of the  United States  Constitution that  applies to the  

states reads:  "No State shall  .  .  .  deprive a   ny person of life, liberty, or property, without  

due process of law . . . ."  U.S. Const. amend. XIV,  1.  

         14       See  generally Jones v. Flowers , 547 U.S. 220 (2006); Mennonite Bd. of  

Missions v. Adams , 462 U.S. 791 (1983);  Walker v. City of Hutchinson, 352 U.S. 112  

(1956); Mullane v. Cent. Hanover Bank & Trust Co. , 339 U.S. 306 (1950).  

                                                        -7-	                                                  7049

----------------------- Page 8-----------------------

a due process violation.  We conclude that even   if   Tagaban's interest was reasonably  

ascertainable, AS 29.45.330(a) does not violate due process interests by limiting its  

foreclosure notice requirement to property owners because AS 29.45.350, which allows  


mortgagees  and  lienholders  to  request  foreclosure  notice,                              provides  a  reasonable  

mechanism by which interest-holders like Tagaban may protect their property rights.  


                    "[P]rior to an action which will affect an interest in life, liberty, or property  


protected by the Due Process Clause of the Fourteenth Amendment, a State must provide  


'notice reasonably calculated, under all the circumstances, to apprise interested parties  


of  the  pendency  of  the  action  and  afford  them  an  opportunity  to  present  their  


objections.'  "            Assessing  the  constitutional  adequacy  of  the  notice  requires  us  to  

balance the "interest of the State" against "the individual interest sought to be protected"  


by the Due Process Clause.                   

                    The central case Tagaban relies on   to challenge the constitutionality of  


AS 29.45.330(a) is Mennonite  Board of Missions v. Adams .                                 In Mennonite the United  


States Supreme Court considered an Indiana law requiring that a municipality send a  


notice of a foreclosure sale to property owners, but not mortgagees or other lienholders.19  


The Court held that "[n]otice by mail or other means as certain to ensure actual notice  


          15        See AS 29.45.350 ("A  holder  of a  mortgage  or  other  lien  on  real property  

may request the clerk to send by certified mail notice of a foreclosure list that includes  

the real property.").  

          16       Mennonite , 462 U.S. at 795 (quoting Mullane, 339 U.S. at 314); see also  

Aguchak  v.  Montgomery  Ward  Co. ,  520  P.2d  1352,  1356  (Alaska  1974)  (adopting  

Mullane 's language for due process analysis under the Alaska Constitution).  

          17       Mullane , 339 U.S. at 314.  

          18        462 U.S. 791 (1983).  

          19       Id. at 793.  

                                                             -8-                                                       7049

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is a minimal constitutional precondition to a pr                  oceeding which will  adversely affect the  

liberty or property interests of  any party . . . if its name and address are reasonably  


ascertainable."            The  Court  ruled  in  favor  of  a  mortgagee  who  had   challenged  the  

Indiana foreclosure notice law because it determined that he was identifiable from the  


publicly recorded mortgage.     Thus it concluded that the municipality's failure to mail  



notice of the foreclosure to the mortgagee's last known address violated due process. 

                   But   as   the   City   points   out,   at   the   time   of   the   foreclosure in Mennonite ,  

Indiana  law   did  not   provide  a  mechanism  for  mortgagees   or  other  interest-holders  

beyond the property owner to request foreclosure notice by mail or personal service.23  

Indiana's foreclosure notice statutes were later amended to include a "request-notice"  

provision,  which  allows  a   mortgagee  or  lienholder  who  wishes  to  be  notified  of  


foreclosure proceedings to file a request with  the clerk  to  be so  notified.                          Alaska has a  

similar request-notice provision at AS 29.45.350, which provides that "[a] holder of a  


mortgage or other lien on real property may request the clerk to send by certified mail  


notice  of  a  foreclosure  list  that  includes  the  real  property."    Because  the  events  in  

Mennonite  occurred  before  Indiana's  request-notice  statute  was  ratified,  the  Court  

          20       Id. at 800 (emphasis in original).  

          21       Id. at 798.  

          22       Id. at 793, 800.  

          23       See  id.  at  793  n.2  (acknowledging  that  Indiana  had  added  a  "request- 

notice" provision subsequent to the events in the case).  

          24       See IND . CODE  6-1.1-24-3(c) (2015) (providing for pre-foreclosure  notice  

by certified mail to any mortgagee who has annually requested such notice).  

                                                           -9-                                                     7049

----------------------- Page 10-----------------------



specifically declined to rule on the constitutionality of request-notice provisions.                                                              Thus,  

the Court did not consider whether a foreclosure notice statute like AS 29.45.330(a)  

violates  the  due  process  rights  of  a  lienholder  when  viewed  in  conjunction  with  a  

request-notice provision like AS 29.45.350.  

                        Since Mennonite , the Indiana Supreme Court and other state courts have  


held that request-notice statutes adequately protect the due process rights of individuals  


                                                                                                                                     These courts  

with non-ownership property interests, like mortgagees and lienholders. 

have persuasively reasoned that request-notice statutes strike an appropriate balance  

between  a  state's  need  to  collect  delinquent  taxes  in  a  manner  that  is  not  overly  


burdensome and an interested party's constitutional right to receive notice prior to a state  



action that will affect his property interest.                                    For example, the Indiana Supreme Court  

has twice held that request-notice statutes do not offend due process with respect to  

mortgagees because they "properly balance[]" the interests of the state and affected  



            25          See Mennonite, 462 U.S. at 793 n.2 ("Because the events in question in this     

case occurred before the 1980 amendment [that added the request-notice provision], the                  

constitutionality of the amendment is not before us.").  



                        See, e.g., M & M Inv. Grp., LLC v. Ahlemeyer Farms, Inc. , 994 N.E.2d  


 1108, 1125 (Ind. 2013); Elizondo v. Read , 588 N.E.2d 501, 504 (Ind. 1992); Barca v.  


Reed , 635 So. 2d 771, 773 (La. App. 1994) (upholding Louisiana's request-notice statute  


because "the safeguards for affording due process are in place"); In re Tax Foreclosure  


No. 35 , 514 N.Y.S.2d 390, 394 (N.Y. App. Div. 1987); Grant Cnty. v. Guyer, 672 P.2d  

702, 707-08 (Or. 1983) (recognizing that foreclosure notice by mail to lienholders who  

request notice does not improperly deny lienholders due process).  

            27          See, e.g., M & M Inv. Grp. , 994 N.E.2d at 1124; Elizondo , 588 N.E.2d at  

504; In re Tax Foreclosure No. 35 , 514 N.Y.S.2d at 393-94.  



                        M & M Inv. Grp. , 994 N.E.2d at 1115; see also Elizondo , 588 N.E.2d at 504  


                                                                          -10-                                                                     7049

----------------------- Page 11-----------------------

                    As  for  Tagaban's  private  interest,  a  lienholder  "possesses  a  substantial  



property interest that is significantly affected by a tax sale."                            But a lien interest does not  



carry  the  same  weight  or  due  process  concerns  as  ownership.                                   A  lien  is  merely  a  

security for a debt and does not give a lienholder title to the land, which otherwise would  


impose a higher notice burden on the state.     The operative question here is whether  

Alaska's        municipal         foreclosure         notice      scheme,        which       requires       lienholders         to  

affirmatively request notice, is "reasonably calculated, under all circumstances, to apprise  


("The interest-holder needed only to complete a simple form to insure notice.  The fact  

that the interest-holder chose not to avail itself of this method of protecting its interest  

is  not  sufficient  grounds  to  demand  that  the  State  be  required  to  conduct  a  more  


burdensome, costly search.  We cannot say that the auditor's failure to go outside the  

prescribed statutory bounds resulted in a constitutional deprivation of due process.").  

          29        Mennonite , 462 U.S. at 798.  Though Mennonite specifically considered  

mortgages, under the Indiana law at issue "a mortgagee acquires a lien on the owner's  


property,"  id.,  and  thus  the  Court's  analysis  -  as  well  as  the  analysis  in  M  &  M  


Investment Group and Elizondo - encompasses lienholder interests.  Alaska follows a  


similar approach to mortgage interests.  See Young v. Embley, 143 P.3d 936, 941 (Alaska  


2006) ("[W]e believe that the territorial view that mortgages in Alaska convey to the  

mortgagee only a lien, not any sort of title, should be retained.") (quoting Brand v. First  


Fed. Sav. & Loan Ass'n of Fairbanks , 478 P.2d 829, 831 (Alaska 1970)).  



                    See M & M Inv. Grp., 994 N.E.2d at 1119 (noting that while a lienholder  


is  entitled  to  reasonable  notice,  "this  does  not,  however,  necessarily  compel  the  


conclusion  that  in  our  weighing  of  the  State's  interest  and  the  private  interest,  a  


[lienholder's] interest will tip the scale to the same degree as a property owner's and thus  

impose  the  same  burden  on  the  State.    Put  simply,  a  [lienholder]  is  not  a  property  




                    See Jones v. Flowers, 547 U.S. 220, 230 (2006) (examining the higher due  

process notice requirements owed by the government when foreclosure "concerns such  

an important and irreversible prospect as the loss of a house").  

                                                              -11-                                                         7049

----------------------- Page 12-----------------------


 [lienholders] of the pendency of the action and afford them an opportunity to present  

their objections."32  

                     The  Indiana  Supreme  Court  characterized  request-notice  provisions  as  


procedures that "protect[] the State's interest in receiving taxes while relieving it of the  

sometimes tremendous administrative burden of checking all public records to ascertain  


whether any [liens] have been taken on the property, whether these [liens] are viable, and  


whether  the  address  on  the  [lien]  is  dependable."                             On  balance,  this  state  interest  


outweighs a private lienholder's interest in having the government search high and low  


to identify him, particularly when a lienholder can protect his interest by filing a simple  

form  with  the  clerk's  office  that  assures  that  foreclosure  notice  will  be  provided.34  

          32        Mennonite , 462 U.S. at 795 (quoting Mullane v. Cent. Hanover Bank &                  

 Trust Co., 339 U.S. 306, 314 (1950)).   

          33        M & M Inv. Grp. , 994 N.E.2d at 1119 (quoting Elizondo , 588 N.E.2d at  


503-04) (alteration in original); see also id. at 1122 ("[W]e believe even the expensive  


and  time-consuming  title  search  through  a  recorder's  office  cannot  reasonably  be  

conceived of as leading to the actual name and address of the actual mortgagee with an  


interest in the property - not in today's era of mortgage-backed securities and trading.  


In fact, the more likely result for these cases on the whole would be a lower accuracy rate  


than  the  method  currently  in  place  -  a  factor  we  must  weigh  significantly  in  our  


analysis."  (citing  Mathews  v.  Eldridge ,  424  U.S.  319,  344  (1976))  (emphasis  in  



          34         Cf.  Ellen  F.  Friedman,  Note,  The  Constitutionality  of  Request  Notice  


Provisions  in  In  Rem  Tax  Foreclosures ,  56  FORDHAM  L.   REV .  1209,  1232  (1988)  

("Although individuals have a constitutional right to receive notice of proceedings that  

will  affect  their  interests  in  property,  the  Supreme  Court's  modern  due  process  


jurisprudence emphasizes reasonableness, flexibility and a balancing of interests under  


the totality of the circumstances.  Given the gravity of the state's interest in real property  


taxation, request notice provisions strike a reasonable balance between the individual's  


constitutional right to receive notice of an impending tax sale and the state's need to  

collect delinquent property taxes inexpensively and expeditiously.").  

                                                               -12-                                                         7049

----------------------- Page 13-----------------------

"[T]his  is  hardly  an  onerous  burden  in  light  of  the  benefit  obtained;  and  is  far  less  


onerous than the burdens the alternative would place on the State in exchange for a far  


                                          The New York Supreme Court, Appellate Division, adopted  

lower degree of benefit." 


this analysis and upheld New York's request-notice statute on similar balancing grounds  


in In re Tax Foreclosure No. 35 .  

                     Other courts have taken the position that request-notice statutes do not  


comport with due process requirements because they improperly relieve the state of its  


obligation to give notice to "reasonably ascertainable" interested parties.    The United  


States Court of Appeals for the Fifth Circuit has held that "[a] party with an interest in  


property does not waive its due process rights by failing to request notice under [a state  

          35        M & M Inv. Grp. , 994 N.E.2d at 1124; see also In re Tax Foreclosure No.  

35, 514 N.Y.S.2d 390, 393 (N.Y. App. Div. 1987) ("The State, which has a crucial stake  


in collecting delinquent taxes through tax sales, also has a substantial interest in avoiding  

the costly and time-consuming burden of ascertaining the identity and location of any  


party with a legally protected interest by resorting to a title search for each delinquent  

parcel.  The  added  costs  and  procedures  entailed  might  well  render  tax  foreclosures  


unprofitable, if not entirely unmanageable.  If such foreclosures became too burdensome  


to conduct, it is quite possible that some municipalities would be utterly overwhelmed  


with delinquent parcels, which would in turn worsen revenue collection problems and  


produce hardships for those who are faithful in the payment of their taxes.").  



                    See  514  N.Y.S.2d  at  394  ("Unlike  the  statute  construed  in  Mennonite ,  


supra , which provided no method for personal notice upon the party there affected, the  

Administrative Code provides a simple means for obtaining actual notice. We consider  

the distinction critical.").  



                    See, e.g., Davis Oil Co. v. Mills , 873 F.2d 774, 788 (5th Cir. 1989); Wylie  

v. Patton , 720 P.2d 649, 653-54 (Idaho App. 1986); Town of Phillipsburg v. Block 22  


Lots 14, 15, 16 , 528 A.2d 98, 100-01 (N.J. Super. Ct. Ch. Div. 1987); In re Foreclosure  


of Tax Liens by Erie Cnty., 481 N.Y.S.2d 547, 550 (N.Y. App. Div. 1984); Seattle-First  

Nat'l Bank v. Umatilla Cnty. , 713 P.2d 33, 35-36 (Or. App. 1986).  

                                                               -13-                                                         7049

----------------------- Page 14-----------------------

request-notice] statute.  Accordingly, a creditor retains the duty to provide notice to  


interested parties whose identity is reasonably ascertainable."                             

                   But the Fifth Circuit's precedent39 relies on the  United States Supreme  


Court's  statement  in Mennonite  that  "a  party's  ability  to  take  steps  to  safeguard  its  


interests does not relieve the State of its constitutional obligation."                         And that statement  

in Mennonite was dicta referencing sophisticated interest-holders who "have means at  


their disposal to discover whether property taxes have not been paid and whether tax sale  

proceedings are therefore likely to be initiated," and thus, the municipality argued, were  



not particularly prejudiced by not receiving explicit notice of the foreclosure. 


Court suggested that such means are not available to the average interest-holder, which  

supported  its  reasoning  that  the  potential  to  predict  a  foreclosure  through  private  

investigative efforts should not influence a state's obligation to give foreclosure notice.42  

         38        Sterling  v.  Block,  953  F.2d  198,  200  (5th  Cir.  1992)  (citation  omitted)  

(citing Davis Oil Co. , 873 F.2d at 788).  

         39        See Davis Oil Co.        , 873 F.2d at 788-90 (citing Mennonite Bd. of Missions  

v. Adams , 462 U.S. 791, 799 (1983)).  

         40        Mennonite , 462 U.S. at 799.  

         41        Id.  

         42        See id. at 799-800; see also  M & M Inv. Grp., LLC v. Ahlemeyer Farms,  

Inc. ,  994  N.E.2d  1108,  1120   (Ind.   2013)  (recognizing  that  the  Court's  statement  in  

Mennonite regarding a party's ability "was  not,  in fact,  a  wholesale  repudiation of any  

and   all   [request-notice]   statutory   obligations   .   .   .   [but  that]  the   statement  refers to the  

relative  sophistication  of a party");  Seattle-First Nat'l Bank, 713 P.2d at 38 (Young, J.,  

dissenting) ("I  do not take the quoted statement to mean that the state cannot require or  

seek assistance to meet its constitutional burden.  Mennonite  instead means that the  

adequacy of whatever step the state has taken to provide constitutionally adequate notice  


is  the  relevant  inquiry.    The  state  has  taken  the  step  of  enacting  [a  request-notice  


                                                          -14-                                                    7049

----------------------- Page 15-----------------------


Mennonite did not address a lienholder's "ability to take steps to safeguard its interests"  

through a simple statutory mechanism that allows the lienholder to request explicit,  

government-initiated notice without expending any particular means other than filing a  


form with the clerk's office.                 Moreover, the United States Supreme Court's decisions  


addressing notice in this context have "never disregarded a party's ability to take steps  

to protect itself.  Rather, the Court has considered the interest-holder's ability to take  


reasonable steps to protect his interest as a crucial aspect of the balancing test."                                        


                    We thus conclude that the foreclosure notice provision of AS 29.45.330(a)  


does not violate a lienholder's due process interests because a lienholder who wishes to  


obtain foreclosure notice can request it under AS 29.45.350.  This statutory structure  


statute]." (footnote omitted)).  

          43        See Mennonite, 462 U.S. at 793 n.2.  

          44        Elizondo v. Read , 588 N.E.2d 501, 504 (Ind. 1992); see  Mennonite , 462  

U.S. at 807 (O'Connor, J., dissenting) ("When we have found constructive notice to be                             

inadequate, it has always been where an owner of property is, for all purposes, unable  

to protect his interest because there is no practical way for him to learn of state action  


that threatens to affect his property interest. In each case, the adverse action was one that  


was completely unexpected by the owner, and the owner would become aware of the  

action only by the fortuitous occasion of reading 'an advertisement in small type inserted  


in the back pages of a newspaper . . . . [that may] not even name those whose attention  


it  is  supposed  to  attract,  and  does  not  inform  acquaintances  who  might  call  it  to  

attention.' " (alteration, omission, and emphasis in original) (quoting Mullane v. Cent.  

Hanover Bank & Trust Co. , 339 U.S. 306, 315 (1950))); Seattle-First Nat'l Bank, 713  


P.2d  at 38 (Young, J., dissenting) ("I do not believe that the majority in Mennonite  


rejected the principle stated in [Justice O'Connor's] dissent. On the contrary, I believe  


that the majority meant that, because publication was the sole authorized means of notice  


under the relevant statute, there was no practicable way for an Indiana mortgagee to  


receive actual knowledge of a pending tax foreclosure. On the other hand, [Oregon's  

request-notice  statute]  does  provide  a  practical,  simple  and  systematic  means  for  a  

recorded lienholder to acquire actual notice." (emphasis in original)).  


                                                              -15-                                                         7049

----------------------- Page 16-----------------------

reasonably balances a lienholder's interest in preserving the ability to enforce a property  


interest against a governmental entity's interest in efficiently collecting delinquent taxes.  


          B.	       Because Tagaban Had Actual Notice Of The City's Foreclosure Before  


                    The End Of The Redemption Period, His Due Process Challenge To  


                    The Redemption Notice Statute Must Fail.  

                    Alaska Statute 29.45.440(a) requires municipalities to send notice of the  


expiration of a redemption period at least 30 days before it ends "by certified mail to  


each record owner of property against which a judgment of foreclosure has been taken  

and,  if  the  assessed  value  of  the  property  is  more  than  $10,000,   to   all  holders  of  

mortgages or other liens of record on the property."  Though Tagaban was not mailed   

a notice of  the expiration of the redemption period, Tagaban did have actual notice  


regarding the redemption period and thus cannot now challenge Alaska's redemption  

notice statute.  


                    Tagaban's attorney communicated with the City's attorney via email in  


October 2010 about the foreclosed property.  Tagaban's attorney asked about the status  

of the property, and the City's attorney's reply specified the tax lien amount and noted  


that "[t]he Foreclosure List was published in three prominent places in Pelican for thirty  

days beginning on May 14, 2010" and that "[i]t was properly served on the property  

owner,  Edward  Bahrt  and  Associates  LLC."    Under  AS  29.45.400  "[p]roperties  


transferred to the municipality are held by the municipality for at least one year.  During  


the redemption period a party having an interest in the property may redeem it by paying  


the lien amount plus penalties, interest, and costs . . . ."  Tagaban thus received actual  

notice  of  the  redemption  period  because  he  was  informed  in  October  2010  that  the  

foreclosure  list  had  been  published  in  May  2010,  which  meant  that  the  foreclosure  


occurred sometime after that date.  Because the redemption period runs for one year,  


when Tagaban received actual notice of the foreclosure the property was still well within  

                                                             -16-	                                                       7049

----------------------- Page 17-----------------------

the redemption period, which did not expire until September 2011.  Because Tagaban  


had actual knowledge of the foreclosure during the redemption period and did not seek  


to redeem the property, he cannot now raise a due process challenge to the redemption  

notice statute.   


          C.	       Tagaban  Is  Prohibited  From  Challenging  The  Foreclosure  And  

                    Redemption Dollar Amounts Because He Failed To Challenge Them  

                    During The Redemption Period.  

                    Tagaban raises two claims related to the foreclosure and redemption dollar  


amounts.  First, Tagaban asserts that "[t]he in rem foreclosure process of AS 29.45 can  


be used only to enforce a local government's claim for unpaid real estate taxes and not  

for any other claims," and argues that the City thus violated the statute by using the  


foreclosure process to enforce non-property-tax claims.                                Second, Tagaban argues that  


foreclosure of a one million dollar property on which roughly $17,000 in unpaid real  


property taxes are due amounts to a due process violation.  The City does not directly  


rebut these claims.  However, we need not reach these issues because Tagaban did not  

challenge the foreclosure or redemption amounts during the redemption period, which  


by law followed the foreclosure of which he had actual notice.                                    Under AS 29.45.450,  


unredeemed property is "deeded to the borough by the clerk of the court" and "gives the  

          45        Tagaban   asserts   that   the   City   "artificially   inflated   the   amount   of  the  

redemption  from   less   than  $17K  (the  unpaid  real  property  taxes  and  interest)  to  

successively higher amounts:                  to $31K   and later to $88K  by adding charges for claims   

that are not enforceable through the municipal tax foreclosure process established in   

AS 29.45 (e.g., for 'freight, payroll, repairs . . . trash, sewer, misc.')."  



                    See AS 29.45.400 ("Properties transferred to the municipality are held by  

the municipality for at least one year.  During the redemption period a party having an  

interest in the property may redeem it by paying the lien amount plus penalties, interest,  

and costs.").  

                                                              -17-	                                                        7049

----------------------- Page 18-----------------------



municipality  clear  title."                 Because  Tagaban  did  not  challenge  the  foreclosure  and  


redemption  amounts  during  the  redemption  period,  he  cannot  now  challenge  those  



          D.        It Was Error To Award Attorney's Fees Under Both  Rule 68 And  

                    Rule 82, But The Award Of Fees Under Rule 68 Was Valid.  


                    Finally Tagaban challenges the superior court's attorney's fee awards.  The  



superior court made two awards of attorney's fees:  one based on Rule 68(b)(1) 



Tagaban  in  his  individual  capacity  and  the  other  based  on  Rule  82(b)(2) 


                                                                                                      Tagaban challenges  

Tagaban in his capacity as a representative in a class action suit. 


the fact that the superior court made two fee awards, its assessment of attorney's fees  

against  a  representative  in  a  class  action  suit,  and  its  award  of  any  attorney's  fees  

whatsoever.  The City seeks to defend both fee awards.  

          47        See also  AS 29.45.440(a) (noting that "every right or interest of a person   

in the properties will be forfeited forever to the municipality" upon expiration of the  

redemption period).  



                    "[I]f the [rejected offer of judgment] was served no later than 60 days after  


the date established in the pretrial order for initial disclosures required by Civil Rule 26,  

the  offeree  shall  pay  75  percent  of  the  offeror's  reasonable  actual  attorney's  fees"  

incurred after the date of the offer.  Alaska R. Civ. P. 68(b)(1).  

          49        "In cases in which the prevailing party recovers no money judgment, the  


court . . . shall award the prevailing party in a case resolved without trial 20 percent of  


its actual attorney's fees which were necessarily incurred.  The actual fees shall include  

fees for legal work customarily performed by an attorney but which was delegated to and  

performed by an investigator, paralegal or law clerk."  Alaska R. Civ. P. 82(b)(2).  



                    Tagaban initially filed this suit as a representative of the Hanson-Tagaban  


class, then after the first filing was dismissed without prejudice he later re-filed his claim  

solely in his individual capacity.  

                                                               -18-                                                         7049

----------------------- Page 19-----------------------

                          1.           Rule 68 and Rule 82 fees in litigation related to the same case  

                          Tagaban  claims  that  the  superior  court  erred  in  making  two  awards  of  


attorney's fees against him.  Alaska Statute 09.30.065 prohibits the award of fees under  



both Rule 68 and Rule 82,                              which the superior court did here.  The City responds that  


the statute prohibits the award of fees under both Rule 68 and Rule 82 "only to the extent  

that the request for fees is being made in the same suit involving the same parties."  It  


suggests  that  assessing  fees  against  Tagaban  under  both  Rule  68  and  Rule  82  is  

appropriate   here   because   Tagaban's   successive   filings   -   first   as   a   purported  


representative of the Hanson-Tagaban class, and second in his personal capacity - were  

not part of the same case.  


                          We addressed this argument in Beal v. McGuire , in which we rejected the  


defendants' argument in support of awards under both Rule 68 and Rule 82 because the  



defendants  did  not  establish  that  the  filings  at  issue  "were  two  different  cases." 


Similarly, the City's argument to support both awards here hinges on whether Tagaban's  


successive filings were part of the same suit.  The City notes that Tagaban's initial case  


was dismissed without prejudice, and that Tagaban  later "refile[d]  the lawsuit in his  

             51           AS 09.30.065(b) ("A party who receives attorney fees under this section   

may not also receive attorney fees under the Alaska Rules of Civil Procedure.");                                                                       see also  

Beal v. McGuire                 , 216 P.3d 1154, 1177 (Alaska 2009) ("A party may not receive awards            

under  both  Rule  68  and  Rule  82  even  if  those  awards  correspond   to  different  time  

periods within the same case.").  



                          216 P.3d 1154, 1177 n.73 (Alaska 2009) ("The defendants argue that the  


Rule 68 and Rule 82 fees awards correspond to entirely separate actions, because the  


plaintiffs changed counsel, amended their complaint, and engaged in more extensive  


discovery once [a preliminary issue] had been resolved. These circumstances do not  

establish that there were two different cases.  Nor are awards under both rules necessary  


to hold plaintiffs responsible for their vexatious conduct . . . ." (internal quotation marks  


                                                                               -19-                                                                          7049

----------------------- Page 20-----------------------


individual capacity."                   (Emphasis added.)  Thus the City's own terminology seems to  

recognize that the successive filings were related to the same suit.  

                      Moreover, the difference in potential relief for the two filings at issue is  


only a matter of scale, not a difference in the character of the legal issues presented.  

Though  the  second  filing  in  Tagaban's  individual  capacity,  rather  than  as  a  class  


representative, narrows the scope of plaintiffs involved, it advances nearly identical legal  


claims.  This precludes dual awards of attorney's fees under both Rule 68 and Rule 82.  

Ruling otherwise would put form over function.   


                      2.	         Rule 82 attorney's fees for litigation related solely to class action  

                                  procedural matters  


                       Tagaban  also  argues  that  attorney's  fees  cannot  be  assessed  against  a  


representative in a class action suit because doing so "offends public policy," among  


other arguments.     The City responds that it is only seeking a Rule 68 award against  


Tagaban "for the litigation he maintained in his individual capacity," but other parts of  


the City's brief seem to justify its request for Rule 82 attorney's fees incurred while  

defending  itself  against  Tagaban's  initial  filing  as  a  representative  of  the  purported  

Hanson-Tagaban class - that is, fees incurred prior to the dismissal without prejudice.  

Indeed,  the  superior  court's  award  of  Rule  82  attorney's  fees  was  against  "the  

Hanson-Tagaban class plaintiffs, jointly and severally."  

           53          The City also notes that "[t]his  case  started off as a purported class action  

lawsuit . . . ," (emphasis added) suggesting that the matter before us now (relating to           

Tagaban's claims in his individual capacity) is part of the "same case" that was initially     

filed by Tagaban as part of a purported class action.  

           54          Though  Tagaban's  brief  discusses  this  issue  in  terms  of  Rule  68,  not  


Rule 82, the question regarding this issue in his list of "Issues Presented For Review"  

is phrased in terms of "attorney's fees" more broadly.  

                                                                     -20-	                                                               7049

----------------------- Page 21-----------------------


                    We  have  previously  considered  whether  Rule  82  fees  can  be  assessed  


against a representative of a class action lawsuit in Weimer v. Continental Car & Truck,  

       55                                                           56 

LLC       and Monzingo v. Alaska Air Group, Inc.                        We have drawn a "distinction between  

fees  incurred  in  litigating  the  merits  of  the  named  plaintiff's  own  claim  and  those  

incurred  in  litigating  class  certification  issues,"  holding  that  Rule  82  fees  are  only  



appropriate for the former.               Accordingly, Rule 82(b) fees should not have been awarded  

for   the   time   the   City   spent   litigating   Tagaban's   "standing   to   sue   as   a   class  


representative."              Here,  the  superior  court  granted  the  City's  motion  to  dismiss  

Tagaban's initial filing as a representative of the Hanson-Tagaban class based solely on  

the superior court's consideration of "who, if anyone, is the proper party to bring an  


action against the City of Pelican for alleged misconduct."  The superior court explicitly  


noted that "the merits of this case have little or no role in this order," and later noted that  


"[t]he [dismissal] order did not address the merits of the case."  Because the first part of  

this litigation (involving the Hanson-Tagaban class, rather than only Tagaban in his  

individual capacity) concluded without considering the substantive merits of the case,  

          55        237 P.3d 610 (Alaska 2010).  

          56        112 P.3d 655 (Alaska 2005).  

          57        Weimer, 237 P.3d at 618; see also id. ("The distinction  lies in the plaintiff's  

financial  incentive  to serve as class representative - a plaintiff has a financial incentive  

to pursue his or her own claim, but is unlikely to risk a greater adverse attorney's fees  

award arising from class certification issues involved in litigating others' claims." (citing  


Monzingo , 112 P.3d at 667)); Monzingo , 112 P.3d at 664-65 ("We are . . . persuaded by  


[the class representatives'] argument that a future class representative seeking a small  

amount of relief will be dissuaded from becoming a named plaintiff in a class action suit  


if he risks high attorney's fees for litigation that goes beyond that required to adjudicate  


the merits of his own case.").  

          58        Albrecht v. Alaska Tr., LLC , 286 P.3d 1059, 1065 (Alaska 2012).  

                                                             -21-                                                        7049

----------------------- Page 22-----------------------

it was improper for the superior court to award Rule 82 attorney's fees against Tagaban  

in his capacity as a purported representative of the Hanson-Tagaban class.  We thus  

vacate the superior court's award of Rule 82 attorney's fees in this regard.  

                   3.        Rule 68 attorney's fees  

                   However, we affirm the superior court's grant of Rule 68 fees to the City  

because  the  City  prevailed  against  Tagaban  in  his  individual  capacity  -  not  in  his  

capacity as class representative - on summary judgment.  

                   Tagaban argues that Rule 68 fees are inapplicable in this case because his  

principal  claims  sought  equitable  relief.    Tagaban's  complaint  did,  however,  seek  


monetary damages "for the harm caused to plaintiff by [the City] when it slandered and  


impaired the plaintiff's judicial lien on the property" and damages "for loss of reputation  

to [Tagaban's] judicial lien in an amount to be determined by judicial proceedings."  

Moreover, the City's offer of judgment roughly approximated Tagaban's pro rata share  


of the Hanson-Tagaban class judgment.  Although we held in  Gold Country Estates  

Preservation  Group,  Inc.  v.  Fairbanks  North  Star  Borough  that  where  a  claim  for  


equitable relief is not accompanied by a claim for monetary damages "[a] Rule 68 offer  


of judgment serves no legitimate purpose,"                        in  Gold Country, there was no way to  


approximate the monetary value of the equitable relief petitioners sought.                                    


                   In  contrast,  Tagaban's  equitable  claims  were  ultimately  in  service  of  

allowing  the  Hanson-Tagaban  class  to  execute  its  1998  judgment.    The  requested  


declaratory relief would merely have served as step one of a two-step process, which, if  


it had been successful, would have awarded Tagaban his pro rata share of the 1998  


judgment.  Thus the only tangible benefit of this litigation recoverable by Tagaban was  

          59       270 P.3d 787, 799 (Alaska 2012).  

          60       See id. (seeking declaratory relief under the Open Meetings Act).  

                                                           -22-                                                        7049  

----------------------- Page 23-----------------------

precisely what the City offered under Rule 68.   We therefore affirm the superior court's  

Rule 68 attorney's fee award.  


                 We AFFIRM  the j  udgment with respect to the foreclosure and redemption  

notice issues because th       e C  ity  was n   ot constitutionally required to provide Tagaban with  

personal notice of the foreclosure and because Tagaban did not timely record his second  


purported lien extension sufficient to warrant redemption notice.  We also AFFIRM the  


superior court's award of Rule 68 attorney's fees, but VACATE its award of fees under  

Rule 82.  

                                                      -23-                                                 7049

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