Opinion ID: 2606991
Heading Depth: 3
Heading Rank: 2

Heading: The District Court Lacked Jurisdiction to Adjudicate the Dispute

Text: District courts are courts of limited jurisdiction. AS 22.15.050. District courts do not have jurisdiction over an action in which the title to real property is in question or actions of an equitable nature, except as otherwise provided by law. AS 22.15.050(1), (2). [1] Kopanuk invokes both of these prohibitions in his brief. He claims that title is in dispute because he has equitable ownership interests in the house. We address only whether this action involves equitable ownership interests. The district court's jurisdiction depends upon whether equitable interests exist. Typically a lease will not give rise to equitable interests in the lessee; however, an installment contract often will give rise to equitable interests in the purchaser. See 3 Richard R. Powell, Powell on Real Property 37-155 (1994). We noted the differences between installment and option contracts in Dillingham Commercial Co., Inc. v. Spears, 641 P.2d 1 (Alaska 1982): The purchaser under an installment land contract is treated as the equitable owner and the vendor as holding the bare legal title merely as security for the purchase price. In contrast, an optionee under a purchase option holds only a contractual right to the land. Id. at 7 n. 7 (citations omitted). Kopanuk argues that the contract at issue is more like an installment contract than a lease/option contract, and urges that the substance of the contract be examined. Conversely, AVCP RHA argues that the contract is a lease-option. Kopanuk emphasizes several contract provisions as evidence that the contract is an installment contract. First is use of the word homebuyer throughout the agreement. [2] Second is the non-refundable contribution of land. Third is the existence of equity accounts for holding payments in excess of a certain amount. Fourth is the lack of a payment required to exercise the purchase option, if exercised after twenty-five years. Fifth is the ability to purchase the home before the price drops to zero by paying the declining balance. Sixth is language in the contract stating that a homebuyer must purchase the home if certain conditions are met, such as ability to meet the routine costs of ownership. AVCP RHA emphasizes other provisions in support of its position. First is a list of homebuyer obligations similar to those in the Uniform Residential Landlord and Tenant Act, citing AS 34.03.120 and MHOA § 5.4. [3] Second is variable monthly payments changeable at AVCP RHA's discretion. Third is a counseling and inspection requirement. Fourth is the income reporting requirement and the restrictions on who may reside in the home. Fifth is the fact that no subletting or assignment is allowed. Sixth is the housing authority's control of insurance. Seventh is detailed termination information. The MHOA is a hybrid contract, containing provisions typical of both lease/option contracts and installment contracts. Indeed, a contract more difficult to categorize is hard to imagine. However, we need not determine the exact label to be applied to the contract, as we conclude that the contract creates equitable interests, or potential equitable interests, in the homebuyer, which preclude the district court from hearing the case. One of the justifications for FED actions is the lack of equity held by the tenant-in-possession. This is not the case here. Equity may exist in fact since the homebuyer has put up land for a down payment. Furthermore, a person who maintains property over a period of years may have equity in the appreciated value of that property. Since the district court lacks jurisdiction over equitable actions, AS 22.15.050(2), the judgment of the superior court is REVERSED. [4]