Court Opinion

ID: 4023919
Source: CourtListenerOpinion
Date Created: 2016-08-12 17:02:27.866151+00
Date Added: 2024-06-11T14:11:01.108053
License: Public Domain

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@akcourts.us.

                THE SUPREME COURT OF THE STATE OF ALASKA

JAMES HENRY BINGMAN, SR.,                       )
                                                )        Supreme Court No. S-16041
                       Appellant,               )
                                                )        Superior Court No. 3DI-13-00107 CI
       v.	                                      )
                                                )        OPINION
CITY OF DILLINGHAM,                             )
                                                )        No. 7118 - August 12, 2016
                       Appellee.	               )

                                                )

               Appeal from the Superior Court of the State of Alaska, Third
               Judicial District, Dillingham, Pat L. Douglass, Judge.

               Appearances:    James Henry Bingman, Sr., pro se,
               Dillingham, Appellant. Charles A. Cacciola, Boyd, Chandler
               & Falconer, LLP, Anchorage, for Appellee.

               Before: Stowers, Chief Justice, Winfree, Maassen, and
               Bolger, Justices. [Fabe, Justice, not participating.]

               MAASSEN, Justice.

I.     INTRODUCTION
               A delinquent taxpayer sought to redeem his foreclosed property by offering
the city a promissory note for the amount due, without interest, that would mature 20
years later. The taxpayer asserted that his offer would be deemed accepted unless the
city satisfied certain requirements to “terminate its power of acceptance.” The city
explicitly rejected the offer by letter and, at the close of the statutory redemption period,
filed for a tax deed in superior court. The taxpayer intervened, arguing that he had
redeemed the property, but the superior court ruled there was no contract between him
and the city. The taxpayer appeals; finding no error, we affirm.
II.   FACTS AND PROCEEDINGS
      A.     Facts
             James Henry Bingman, Sr., the owner of 14 parcels of real property in the
City of Dillingham, did not pay property taxes on the parcels from 2006 to 2011. He
eventually paid the 2006-2007 taxes, but the City petitioned for foreclosure of his
property because of the taxes still outstanding.
             The superior court entered a judgment and decree of foreclosure in June
2014, conveying Bingman’s property to the City subject to a statutory one-year right of
redemption.1 Four days later the City received from Bingman a “Security Agreement”
and a “Promissory Note.” In the security agreement, Bingman accepted liability for the
2008-2011 taxes and penalties. The promissory note, which would mature in 20 years,
stated that Bingman “promise[s] to pay to the order of the City of Dillingham . . .
$88,250.49,” the present value of the delinquency (but without future interest). The
agreement provided that once the note was delivered to and accepted by the City, its tax
judgment would be deemed satisfied and, in exchange, the City would be entitled to
enforce the note against Bingman. In essence, Bingman offered to satisfy the tax
judgment against him with his own promise that he would pay the taxes in 20 years.
             The security agreement required the City, in order to effectively reject
Bingman’s offer, to (1) return the agreement and all attachments; (2) deliver a corrected
statement of account; (3) deliver notification of refusal of tender and provide legal

      1
             AS 29.45.400 (providing that a party with an interest in foreclosed property
may redeem the property within one year); Dillingham Municipal Code (DMC) 4.15.270
(2016) (providing a one-year redemption period for an interested party).
                                           -2-                                     7118

citations explaining why the tender was defective; and (4) deliver a signed notification
of rejection with legal citations and an affidavit explaining why the agreement was
unreasonable, in a form admissible in court. The City was given 14 days to reject the
agreement; silence or an inadequate rejection would constitute acceptance. And any
correspondence mailed to an address other than Bingman’s California “Service Address”
would not be considered “received” by Bingman.
             On June 16, 2014, the City mailed a letter in which it rejected all of
Bingman’s “terms, offers, proposals, and requests”; the letter was sent to Bingman’s
Dillingham address instead of the California address he had designated for service. The
City did not return the promissory note or any other of Bingman’s documents. Bingman
asserts that by June 28 — after his 14-day deadline — he had not received the City’s
letter. Over the year that followed he did not make any other attempts to redeem the
property.
        B.   Proceedings
             On July 20, 2015, after publishing notice that the redemption period was
expiring, the City asked the superior court to issue a tax deed for 13 of Bingman’s
properties.2 The court allowed Bingman to intervene as a party of interest “for the
limited purpose of litigating whether he exercised his right of redemption.” In support
of a motion to compel the City to acknowledge his satisfaction of the underlying
judgment of foreclosure, Bingman argued that he had redeemed the property because the
City accepted his offer through silence, kept the promissory note as “tender,” and failed
to satisfy his requirements for a proper rejection. The superior court denied Bingman’s
motion and concluded that he had not redeemed the property, noting that he had tried the

        2
             One of Bingman’s 14 foreclosed properties had been redeemed by someone
else.
                                           -3-                                     7118
same strategy unsuccessfully in an earlier tax case.3 The court held that no contract
existed because there was no meeting of the minds and that in any event Bingman’s
proposed contract would have been unenforceable under the statute of frauds. Bingman
moved for reconsideration, which the superior court denied. Bingman appeals.
III.   STANDARDS OF REVIEW
             We review “questions of contract formation and interpretation de novo” in
the absence of factual disputes.4 Factual findings relevant to contract formation are
reviewed for clear error.5 “Findings are clearly erroneous if review of the entire record
leaves us with ‘a definite and firm conviction that a mistake has been made.’ ”6
             A trial court’s denial of a motion to compel acknowledgment of the
satisfaction of a judgment is reviewed for abuse of discretion.7

       3
           See Bingman v. City of Dillingham (Bingman I), No. S-15706, 2015 WL
8521289 (Alaska Dec. 9, 2015).
       4
            Chilkoot Lumber Co. v. Rainbow Glacier Seafoods, Inc., 252 P.3d
1011,1014 (Alaska 2011) (citing Copper River Sch. Dist. v. Traw, 9 P.3d 280, 283
(Alaska 2000)).
       5
             Id. at 1014 n.2 (citing Munn v. Thornton, 956 P.2d 1213, 1217-18 (Alaska
2000)).
       6
             Sherman B. v. State, Dep’t of Health & Soc. Servs., Office of Children’s
Servs., 290 P.3d 421, 427-28 (Alaska 2012) (quoting Barbara P. v. State, Dep’t of
Health & Soc. Servs., Office of Children’s Servs., 234 P.3d 1245, 1253 (Alaska 2010)).
       7
               See AS 09.30.300(a) (“[U]pon motion, the court may compel an
acknowledgment of satisfaction or may order the entry of satisfaction to be made without
it.”); cf. Flores v. Huppenthal, 789 F.3d 994, 1000-01 (9th Cir. 2015) (noting that an
abuse of discretion standard applies to a federal district court’s decision whether “to
relieve a party from final judgment if ‘the judgment has been satisfied, released, or
discharged’ ” (quoting Fed. R. Civ. P. 60(b)(5))).
                                           -4-                                     7118

IV.	   DISCUSSION
       The City Did Not Accept Bingman’s Offer.
              Bingman argues that he formed a contract with the City because the City
“did not terminate its power to accept . . . in accordance with the terms of the offer,”
manifested assent by accepting and retaining the promissory note as “tender,” and
intended its silence to operate as acceptance. These arguments have no support in either
the law or the facts.
              Until an offeree unequivocally accepts the offeror’s terms, there is no
contract.8 The mere fact that the offeree has not “terminate[d] its power to accept” the
offer is not, without more, evidence that it has accepted. And in this case the evidence
shows the opposite: that the City explicitly rejected Bingman’s offer. The City’s June
16, 2014 letter to Bingman stated that “[a]ll the terms, offers, proposals, and requests
contained in your correspondence are rejected. The City does not agree to grant any kind
of security interest to you for any reason, nor does it accept your apparent proposal to
enter into a promissory note.”
              Bingman argues that the City actually accepted his offer because it did not
return the promissory note to him along with its rejection letter. But a debt is not
automatically discharged or suspended simply because the debtor mails the creditor a
promissory note and the creditor keeps it. Alaska Statute 45.03.310(b) provides that “if
a note . . . is taken for an obligation, the obligation is suspended to the same extent the
obligation would be discharged if an amount of money equal to the amount of the

       8
              See Municipality of Anchorage v. Stenseth, 361 P.3d 898, 906 (Alaska
2015) (identifying “an unequivocal acceptance of the terms [of the offer] by the offeree”
as one of the requirements for the formation of an express contract (quoting Childs v.
Kalgin Island Lodge, 779 P.2d 310, 314 (Alaska 1989))).
                                            -5-	                                     7118

instrument were taken.” But “ ‘[t]aking’ the instrument . . . requires more than simply
its delivery by the obligor to the obligee. The obligee must perform some act of
accepting the instrument in either conditional or absolute payment of the obligation.”9
An obligee who returns the instrument clearly has not taken it; one who negotiates or
deposits the instrument clearly has.10 But if an “obligee retains the instrument but does
not negotiate or deposit it,” then “his intent to accept the instrument in payment
determines whether he takes the instrument for the underlying obligation.”11 In such a
case, “[t]he court should examine what objectively appears to be the obligee’s intent as
evidenced by his actions.”12
              The City’s actions clearly indicate that it did not intend its retention of the
note to operate as an acceptance of Bingman’s proposal. Its rejection letter could leave
no doubt in a reasonable mind; and even if Bingman did not receive the City’s letter
because it was not mailed to his stipulated service address, as he contends, the letter is
still objective evidence of the City’s contemporaneous intent. The City confirmed this
intent by its later, wholly consistent conduct. If a property is redeemed, the City is
required by statute to “record the redemption and issue a certificate containing a property
description, the redemption amount, and the dates of judgment and decree of

       9
              6 WILLIAM D. HAWKLAND & LARY LAWRENCE, HAWKLAND’S UNIFORM
COMMERCIAL CODE SERIES § 3-310:1 (Frederick H. Miller ed., rev. ed. 2016); see also
6B DAVID FRISCH, LAWRENCE’S ANDERSON ON THE UNIFORM COMMERCIAL CODE
§ 3-310:6 (3d rev. ed. 2016) (“[T]he obligee’s receipt by mail of an instrument does not
constitute her taking of the instrument for the underlying obligation.”).
       10
              HAWKLAND & LAWRENCE, supra note 9.
       11
              Id.
       12
              Id.
                                            -6-                                        7118

foreclosure.”13 But the City never recorded Bingman’s “redemption,” nor did it issue a
certificate indicating that he had redeemed the property. Instead, beginning June 11,
2015, the City published a “Notice of the Expiration of Redemption Period” for four
consecutive weeks and sent copies of the notice to all lienholders of record.14 On July 20
the City moved for the properties to be transferred by tax deed because they had not been
redeemed. It requested a tax deed for only 13 of the 14 properties it had foreclosed upon
because a different person redeemed one of the lots (even though, according to Bingman,
he had already redeemed that lot himself by his security agreement).
              Bingman also argues that it was the City’s responsibility to make sure he
knew about its rejection, because he had informed the City he would interpret its silence
as acceptance. The Restatement (Second) of Contracts notes that “[t]he mere fact that
an offeror states that silence will constitute acceptance does not deprive the offeree of his
privilege to remain silent without accepting,” and “the offeror who has invited such an
acceptance cannot complain of the resulting uncertainty in his position.”15 As the
plaintiff, Bingman bore the burden to prove “unequivocal acceptance by the [City] and
an intent to be bound” by the terms of the purported contract.16 The evidence supports

         13
              AS 29.45.410; DMC 4.15.280.
         14
              See AS 29.45.440(a) (providing for notice and preparations before the
expiration of the redemption period); DMC 4.15.310(A).
         15
              RESTATEMENT (SECOND)        OF   CONTRACTS § 69 cmt. c (AM. LAW. INST.
1981).
         16
            Magill v. Nelbro Packing Co., 43 P.3d 140, 142 (Alaska 2001) (quoting
Davis v. Dykman, 938 P.2d 1002, 1006 (Alaska 1997)).
                                             -7-                                       7118

only the conclusions that the City did not remain silent at all and that, through its letter
to Bingman and its subsequent conduct, it fully intended to reject Bingman’s proposal.17
V.     CONCLUSION
              We AFFIRM the superior court’s judgment.18

       17
             We necessarily reject Bingman’s argument that he repurchased the property
pursuant to AS 29.45.470, which allows a taxpayer to repurchase foreclosed property
that remains in municipal ownership. His June 2014 offer was made well before the
repurchase period, which began when the deeds transferred the property to the City in
July 2015. And his offer failed to meet any of the provisions of the statute for calculating
the purchase price. See AS 29.45.470(a)(1)-(4).
              Bingman also argues briefly that he has been deprived of due process and
equal protection because the superior court failed to “exercise due care.” But Bingman
has not demonstrated that the superior court committed any error, let alone any that rises
to the level of a constitutional violation.
            Finally, because of our decision that there was no contract, we find it
unnecessary to reach the statute of frauds, the superior court’s alternative ground for
denying Bingman’s motion.
       18
             In light of the frivolousness of Bingman’s arguments, we will entertain a
motion by the City for its full reasonable attorney’s fees incurred on appeal. See Alaska
R. App. P. 508(e)(2)-(3).
                                            -8-                                       7118