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.

THE SUPREME COURT OF THE STATE OF ALASKA

STEPHANIE SHIELDS,

Appellant,

v.

IDA MAE CLARK,

Appellee. )

)

)

)

)

)

)

)

)

) Supreme Court No. S-18325

Superior Court No. 3PA- 19 -01749 CI

O P I N I O N

No. 7668

– August 18, 2023

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

Judicial District, Palmer, Kristen C. Stohler, Judge.

Appearances: Joseph P. Josephson, Josephson Law Offices

LLC, Anchorage, for Appellant. Darryl L. Jones, Law

Office of Darry l L. Jones , Pal mer, for Appellee.

Before: Maassen, Chief Justice, Carney, Borghesan, and

Henderson, Justices. [Pate, Justice, not participating.]

CARNEY , Justice

.

INTRODUCTION

A man and woman and the man’s grandmother decided to buy a home that

they would share. They also decided that because the woman qualified for a mortgage

with better terms than the others, the mortgage would be in her name. The grandmother

sold her home to provide money to buy the shared home and signed a gift letter to enable

the wo man to qualify for a mortgage.The relationship between the man and woman deteriorated and she tried

to sell the home. She refused to repay the grandmother the money the grandmother had

contributed to the home purchase. The grandmother sued her.

The superior court determined that the grandmother had not provided the

money as a gift. The court also concluded that a written agreement the woman had

signed confirmed their oral agreement to jointly bu y the home and that therefore their

agreement did not violate the statute of frauds. The court ordered the woman to repay

the grandmother the money she had contributed to the home purchase, as well as a

portion of the grandmother’s attorney’s fees.

The woman appeals. We affirm the superior court ’s decision

.

FACTS AND PROCEEDINGS

A. Facts

After dating for a few years, Stephanie Shields and Timothy Wilkinson

decided to combine their households in 2017. At that time Wilkinson was living in a

home owned by his grandmother Ida Mae Clark. Clark owned two homes; Wilkinson

lived in one and she lived in the other. After Clark suffered a mild stroke, Shields,

Wilkinson, and Clark agreed that it would be best for her to live with them. They

decided to pool their resources to purchase a home. Shields hired a realtor she

previously worked with to help. The realtor helped them find and purchase a new home,

and he helped Clark sell the home that Wilkinson lived in.

After they found and made an offer on a new home, Shields applied for a

mortgage because she had a higher credit score than Wilk in son and she was eligible for

a Veterans Administration (VA) mortgage. Clark sold the home Wilkinson lived in to

provide funds to qualify for the loan. On June 23, 2017, Clark transferred $111,213.14

to Shields from the sale of her home. From that total $5,000.00 was paid as rent to the

sellers for the time before the VA mortgage closed; the remaining amount w as used for

the down payment on the home.

- 2

- 7668On July 5, while Wilkinson was out of town, Shields brought Clark to the

mortgage office. At the mortgage office Clark was given a form entitled “Gift Letter”

to sign. 1 Th e line on the form that stated “I have made a gift of $ ________” was

completed with “$ 111,213.14 to Stephanie L. Shields” and identified her as Clark’s

“granddaughter.” The form also stated

, “ N o repayment of the gift is expected or

implied in the form of cash or by future services of the recipient.” Clark asked for

Wilki nson to join them three times before she agreed to sign the letter. Shields

subsequently received the VA mortgage; it and the title to the home were solely in her

name.

Wilkinson learn ed of the gift letter after he returned. He contacted an

attorney to “ protect [] . . . the down payment on the house.” The attorney drafted a

memorandum agreement for Wilkinson and Shields. After several drafts Shields signed

the agreement on February 24 because she wanted to ensure that if she or Wilkinson

“fa iled to pay [their] half of the bills, then that amount [would] be made good at the

time of payout

. ” The agreement outlined how funds would be divided between Shields

and Wilkinson upon the sale, transfer, or other disposal of the house and acknowledged

t hat “the parties used $106,000 .00 from Timothy Wilkinson’s family” to purchase the

property.

Shields and Wilkinson’s relationship began to deteriorate. On August 31

Shields posted a n otice to q uit on Clark’s bedroom door. The notice required Wilkinson

and Clark to vacate the home “at least 30 days from the date” of receipt and informed

the m that the house was being sold. On September 25 Clar k’s attorney sent Shields a

demand letter that asserted Clark’s equity interest in the property. When Shields did

not respond, Clark filed a complaint in June 2019.

1 The mortgage broker later testified that gift letters are used by lenders to

document and verify that third

- party funds used for down payments were obtained as a

gift rather than a loan that might constitute a compe ting interest in the property

.

- 3

- 7668B. Proceedings

Shields answered the complaint and admitted “that $106,000 for the down

payment was provided by plaintiff.” I n August Clark moved for a preliminary

injunction to “enjoin [S hields] from selling the residence

. . . until the issues raised in

the Complaint [could] be resolved.” In her response Shields argu ed that Clark did not

demonstrate that she would face “irreparable harm” or show probable success on the

merits. T he super ior court denied Clark’s motion for a preliminary injunction,

concluding that she “fail[ed] to show an irreparable harm.” B ut the court ordered that

any proceeds from the house’s sale be held in trust until further order.

A two

- day trial was held in Ju ne 2021. T he parties disputed the nature of

the relationship between Shields and Clark and the meaning and effect of the gift letter.

The superior court issued its findings of fact and conclusions of law i n December

.

The court found that the equity f rom the sale of Clark’s home was

“deposited into Shields ’s account.” It noted that the real estate agent “testified [that]

most of the proceeds” from the sale of Clark’s home “were used for the down payment

on the Property .” The court concluded that “[t]he evidence clearly demonstrates the

parties, together with Wilkinson, had an agreement to pool their financial resources to

purchase a home” and that “Shields never refuted Clark’s and Wilkinson’s testimony

that the money was intended to represent their investment in the Property.”

T he court found that Shields’s claim was “ simply not supported by the

record.” It concluded that “the parties had a valid agreement to purchase the Property

jointly” and the memorandum agreem ent was “a sufficient writing to satisfy the s tatute

of f rauds or, in the alternative, constitutes an admission pursuant to [ AS ] 09.25.020(4)

, ”

which exempts an agreement from the statute of frauds based on a party ’s admi ssion to

making the agreement. It then order ed Shields to reimburse Clark for the $106,000 she

had provided for the down payment.

- 4

- 7668Clark filed a motion for attorney’s fee s, and Shields filed a motion for

reconsideration. The superior court denied Shields’s motion for rec onsideration and

granted Clark’s motion for attorney’s fees as the prevailing party under Civil Rule 82. 2

The court entered final judgment, awarding Clark $106,000 plus interest, costs, and

$13,100 in attorney’s fees, for a total of $128, 395.61. Shields appeals.

STANDARD OF REVIEW

“[D]etermining the intent of the parties when entering a contract is a

question of fact” that we review for clear error. 3 A factual finding is not clearly

erroneous unless we are “left with ‘the definite and firm conviction on the entire record

that a mistake has been committed.’ ” 4

“Questions of law are reviewed de novo; under this standard, it is this

court’s duty ‘to adopt the rule of law that is most persuasive in light of precedent,

reason, and policy.’ ” 5

DISCUSSION

A. The Superior Court Did Not Err By Finding That The Parties

Intended To Purchase The Property Together.

Shields argues that Clark “expressly disclaimed any interest in the .

. .

property” when she signed the gift letter and that “past consideration is no

consideration.” Clark responds that “the evidence in the record” demonstrates that she

“intended that the money be repaid when the house was sold” and that Shields admitted

the money was not a gift by signing the memorandum agreement.

2 Alaska R. Civ. P. 82 authorizes the court to award attorney’s fees to

prevailing party in civil case.

3 Bibi v. Elfrink , 408 P.3d 809, 815 (Alaska 2017).

4 Caswell v. Ahtna, Inc. , 511 P.3d 193, 197 (Alaska 2022) (quoting Fun

Prods. Distribs., Inc. v. Martens , 559 P.2d 1054, 1058 (Alaska 1977)).

5 Sisters of Providence in Wash. v. A.A. Pain Clinic, Inc. , 81 P.3d 989, 1005

n.45 (Alaska 2003) (quoting Langdon v. Champion , 752 P.2d 999, 1001 (Alaska 1988)).

- 5

- 7668There is no dispute that Clark transferred the proceeds from the sale of her

home to Shields to pay the down payment on a home to be shared. There is also no

dispute that Clark signed the gift letter that stated that “[n]o repayment of the gift is

expected or imp lied in the form of cash or by future services.” What is disputed is

Clark’s intent when she transferred the money to Shields.

To determine Clark’s intent the superior court looked at the evidence

presented about the parties’

— Shields’ s , Wilk in son’s, and Clark’s

— intent when they

decided to buy the house. The court found that “ [t] here [ was ] no dispute that the parties

intended to combine their households so that Shields and Wilkinson could help take

care of Clark as she aged.” The court considered the real estate agent’s testimony that

the parties wanted to sell Clark’s home to combine their assets to purchase a home

together. It found that the proceeds from the sale of Clark’s home were transferred to

Shields to fund the down payment on the proper ty. It also noted that Clark authorized

depositing the proceeds of her home into Shields ’ s account despite her repeated request

to have Wilkinson present before she made the decision

.

The court considered the mortgage broker’s testimony that the gift l etter

was required for Shields to qualify for the home loan

. It also considered that after the

property was purchased , t he parties met with an attorney to document the Wilkinson

family’s interest in the property. It noted that , without challenging the family’s interest,

Shields signed the agreement requiring her to pay Wilkinson $106,000 from the

proceeds if the property sol d

. T he court concluded that “ Shields’s p osition that the

money was an unconditional gift to her is simply not supported by the record

. ” 6 It found

6 Shields includes additional claims concerning her credibility, such as her

status as “a disabled military veteran.” “We

. . . ‘give particular deference to the

superior court’s factual findings when

. . . they are based primarily on oral testimony,

because the superior court, not this court, judges the credibility of witnesses and weighs

conflicting evidence.’ ” Laybourn v. City of Wasilla , 362 P.3d 447, 452 (Alaska 2015).

- 6

- 7668- 7

- 7668 that “Shields never refuted Clark’s and Wilkinson’s testimony that the money was

intended to represent their investment in the P roperty

, ” nor did sh e present “testimony

or evidence of a credible alternate arrangement.”

Whether the transferred money described in a gift letter is in fact a gift

depends on the parties ’ intent. 7 In Osterkamp v. Stiles parents gave their son and his

partner a lump sum to finance the purchase of the couple’s home

. 8 The parents signed

gift letters indicating the money was a gift

. 9 The partner made monthly payments to

the parents , and the mother later testified that the parents int ended the money as a loan

“ but with no interest and without a deadline for repayment.” 10 When the couple split

and the partner argued that s he was not required to repay any of the money, the superior

court found that the money was a loan. 11 The court con cluded that despite the

“rebuttable presumption that transfers of funds between close relatives are not actual

debts,” and the gift letter ’s statement that “[n]o repayment of this gift is expected or

implied either in the form of cash or by future services of the recipient,” the evidence

presented demonstrated that the partner was obligat ed to repay the parents

. 12 W e

affirmed the superior court , holding that it had not clearly erred by concluding the

parents had rebutted the presumption that the money was a gift

. 13 Similarly here, the

superior court did not clearly err by finding that Clark’s contribution was intended to

7 See Osterkamp v. Stiles , 235 P.3d 178, 191

- 92 (Alaska 2010).

8 Id. at 183.

9 Id.

10 Id.

11 Id.

12 Id. at 191 (alteration in original). This evidence included monthly

payments with “home loan” written on each check.

13 Id. at 191-92.represent her interest in the ho me. 14

As the superior court concluded, “[t]he evidence clearly demonstrate [ d ]

the parties, together with Wilkinson, had an agreement to pool their financial resources

to purchase a home” and “ Shields never refuted Clark’s and Wilkinson’s testimony that

the money was intended to represent their investment in the Property.” Although the

memorandum agreement was signed after the transfer of funds, the parties ’ agreement

itself preceded the purchase of the home.

B. The Memorandum Agreement Satisfies The Statute Of Frauds.

Alaska’s statute of frauds, AS 09.25.010, aims “to prevent fraud by

requiring that certain categories of contracts be reduced to writing.” 15 The statute states

that “an agreement for leasing for a lo nger period than one year, or for the sale of real

property, or of any interest in real property” is not enforceable “unless it or some note

or memorandum of it is in writing and subscribed by the party charged or by an agent

of that party.” 16

Shields a rgues that the memorandum agreement did not satisfy the s tatute

of f rauds because the statute requires both signatures to make the agreement effective

and Wilkinson never signed the document. Sh e is incorrect. The statute of frauds

requires only the sign ature of the party charged

— that is, Shields

— and she signed the

agreement. The agreement states that “the parties used $106,000 .00 from Timothy

Wilkinson’s family” to purchase the property and requir es that if the property is

transferred, sold, or otherwise disposed of, “[t]he first $106,000 .00 [goes] to Timothy

Wilkinson.” The superior court concluded that the memorandum agreement satisfied

14 The presumption that transfers between close relatives are not debts does

not apply here. Although a handwritten entry on the gift letter identified Shields as

Clark’s granddaughter, that is not true.

15 Alaska Democratic Party v. Rice , 934 P.2d 1313, 13 16 (Alaska 1997).

16 AS 09.25.010(a)(6).

- 8

- 7668the s tatute of f rauds

. The court concluded that it is a “ ‘ note or memorandum ’ signed

by the party against whom enforcement is sought ” and “ there i s no serious possibility

of consummating a fraud by enforcement” based on “ the admitted facts, the surrounding

circumstances, and all explanatory and corroborative and rebutting evidence

. ” We

agree.

Shields also argues that “[t]he agreement does not state any fact or

proposition of fact which creates any right or claim in anyone else, except, arguably,

the statement that ‘the parties used $106,000.00 from Timothy Wilkinson’s family’ in

order ‘to purch ase the property.’ ” Clark is not explicitly named in the agreement, b ut

t he superior court relied on the memorandum agreement as corroboration of the oral

contract . It then determine d that the amount Clark transferred to Shields was not a

gift. 17 And it is not disputed that Clark contributed to the home and is part of

Wilkinson’s family

.

Shields compares this case to Diggins v. Johnson 18 and Kiernan v.

Creech

, 19 and a sserts that we should not enforce a contract or quasi

- contract w here real

estate interests are involved. In Diggins we declined to allow a real estate brok e r to

recover a commission from the sellers after a property sale fell through

. 20 Because there

was n o agreement in writing, we joined “[t]he overwhelming weight of the authority in

other jurisdictions hold [ing] that a real estate broker may not recover the value of his

services in quantum meruit when he has failed to comply with a statute specifically

req uiring written contracts for commissions for the production of a purchaser for real

17 Because the superior court did not enforce the agreement and instead

relied on it as a memorandum that satisfied the statute of frauds, we do not reach

Shields’s additional arguments related to its enforcement.

18 513 P.2d 660 (Alaska 1973).

19 268 P.3d 312 (Alaska 2012).

20 513 P.2d at 661-62.

- 9

- 7668property.” 21

In Kiernan we reversed summary judgment in a case involving a dispute

over the purchase of a commercial lot. 22 The parties disagreed over “whether their ora l

agreement provided that they would co-own the property, or that the non-titled party

would lease from the title- holder.” 23 We concluded that “ the substance of the oral

agreement [was] a disputed fact material to resolving whether an exception to the statute

of frauds applie[d].” 24 We noted that “[i]f the non -titled party can prove .

. . that the

parties had a contract for co-ownership with definite terms, he may be able to succeed

on his claims that promissory estoppel or the part performance doctrine make [the]

contract enforceable despite the statute of frauds.” 25

Neither case is applicable here. Th e broker’s entitlement to a commission

in Diggins sheds no light on a grandmother’s entitlement to reimbursement for her

contribution to a shared house. And Kiernan ’s revers al of summary judgment based on

the existence of factual issues regarding the application of the statute of frauds is not

relevant to the superior court’s post -trial decision here.

C. The Memorandum Agreement Constitutes An Admission Pursuant

To AS 09.25.020(4).

The superior court also hel d that “even if the Amended Memorandum

Agreement were insufficient to satisfy the statute of frauds, it is an admission for

purposes of AS 09.25.020(4), thus excepting the parties’ agreement from the statute of

frauds.”

21 Id. at 664.

22 268 P.3d at 314.

23 Id.

24 Id.

25 Id.

- 10

- 7668Alaska Statute 09.25.020(4) provides that a contract, promise, or

agreement subject to the statute of frauds may still be enforceable if “the party against

whom enforcement is sought admits, voluntarily or involuntarily, in pleadings or at any

other stage of this or any other action or proceeding the making of an agreement.”

Shields asked the attorney who drafted the memorandum to revise it

several times before she signed the final version. 26 And in her answer to the complaint,

she admitted “that $106,000 for the down payment was provided by the plaintiff.” The

written memorandum agreement and Shields’s admission in her answer support the

superior court’s alternative basis for concluding that Clark’s rei mbursement was not

barred by the statute of frauds. The superior court did not err.

CONCLUSION

We AFFIRM the superior court’s decision. 27

26 Shields also argues that the superior court erred by awarding Clark her

down payment because Clark has “unclean hands.” Shields asserts that “ in signing the

Gift Letter [Clark] was deliberately tricking the Veterans Administration

. ” Although

Clark signed the gift letter, it was Shields who had it prepared and then used it to qualify

for the VA home loan. Because she lacks clean hands herself, she cannot rely on th is

equitable principle

. See Al aska Cont’l Bank v. Anchorage Com. Land Assocs. , 781 P.2d

562, 565 n.6 (Alaska 1989) (“A party seeking to invoke equitable principles must come

before the court with clean hands.”).

27 Shields did not brief the attorney’s fee issue she listed in her points on

appeal. She has waived the issue

. Hymes v. DeRamus , 222 P.3d 874, 887 (Alaska

2010) (“[I]ssues not argued in opening appellate briefs are waived.”).

- 11

- 7668