Alaska Bar Assoc. — Bankruptcy Section

We just spoke at the Alaska Bar Association — Bankruptcy Section on the issue of the Alaska usury statute.  We had less than two hour notice to prepare for the presentation.  The materials are available at the Bar Office.

The attendees seemed surprised to learn that the Cox v. Cooper decision actually doesn’t have very wide sweeping effect.  There are seven state statutes that exempt whole classes of creditors and transactions from the decision.  Two Federal acts also limit the decisions scope:  The Banking Act of 1864 and the Depository Institutions and Deregulation and Monetary Control Act of 1980.  These two acts exempt all federal banks and state banks that compete against federal banks from state regulation.  Add to that the Marquette National Bank v. First of Omaha Service Corp. and Smiley v. Citibank decisions and all interest and fees for banks are exempt from state regulation.

The Cox v. Cooper decision only concerns local Alaska credit between private parties.  The sky is not falling.  Even though the creditors bar insists that it is.  I wonder how much money the local and national banks will pay in fees for amicus briefs on a local issue with no bearing on their operations?  Indeed, regulating hard money lenders could actually send more business to the banks.

Thank you for the invite, Michelle Boutin, Chair of the Alaska Bar Association — Bankruptcy Law Section.

 

Anchorage Platting Board Appointment

Dear Clayton Walker, Jr.,

Congratulations!  Your reappointment for the Platting Board has been approved by the Assembly for another three years, extending to October 14, 2018.

Attached is the Assembly Memorandum No. AM 617-2015.

Thank you so much for your time, dedication and service!  You are greatly appreciated!

Sandy Johnson

Municipality of Anchorage — Clayton Walker, Jr.Current Planning

 

 

Watch the Details When Leasing

When it comes to Landlord Tenant relationships, you need to watch the details.

Representing Landlords or Tenants in Lease Review
Representing Landlords or Tenants in Lease Review

In general, most people want to be liked and don’t want to sow seeds of hate and discontent.  When given the opportunity to agree and be amiable about something, and if there’s no obvious downside, we jump right up on that wagon and go for the ride.  But when it comes to legal relationships, rethink that impulse.

When one moves into a new property there is the inevitable signing of lease agreements, walk-through, and a myriad of other formalities.  Unfortunately, too often these formalities are either overlooked or ignored altogether.

Lease terms:  Know what the lease says.  Unfortunately most renters have little or no say in what the terms are.  Many leases are just basic forms someone swiped off the internet and was never designed for your specific property.  Know who’s responsible for what.  Know what the late fee terms are.  Know how to get a hold of your landlord or management company if there’s a problem.  Many see this as just a routine formality, but if there are later problems it’s the lease terms that tell you what you can and can’t do to fix it.

The walk-through:  this gets a lot of folks in trouble.  We all want to be nice and not complain, to go along to get along.  But your failure to note each item out-of-place is essentially your acceptance.  Who wants to complain to the little ol’ lady showing you the apartment?  You’re all best buds, aren’t you?  They won’t do you wrong.  What’s a little carpet staining, anyway?  Well, two years later that carpet stain belongs to you.  So does the scratched linoleum floor in the kitchen.  And the cracked window.  And the hole in the wall behind the kid’s bedroom door.  And anything else you felt just wasn’t important enough to mention.  Put all of this down on the report.  Your security deposit depends upon it.

When things do go wrong:  Sooner or later something comes up.  The heat goes out, the entry walk lights burn out, the neighbors just bought their teenaged son a new bass guitar, or the local nocturnal recreational pharmaceutical distributor just moved in next door.  Don’t hesitate to contact the landlord.  Better yet, and often required, put such notices in writing.  You don’t want to cause waves, after all, who wants to move out in the middle of winter?  But your ability to properly address the problems can depend on who you notified when, and how.  Landlords must give all notices in writing.  Tenants, too, if they wish to get out of their lease under proper circumstances, usually must also notify the landlord of any problems in writing.  When there’s a later argument about the right to terminate the lease, you will want to make sure you have all the documentation you can get.

Don’t be afraid to speak up and write things down.  When getting into that new apartment, make sure you are not taking the responsibility for old carpets and broken fixtures.  You can be sure that on the move-out report the landlord will list each anomaly they see.  If it you didn’t note it at the beginning then they will probably blame you.   Legal relationships require you to think about the details in the beginning or suffer consequences later.

These are just a few of the things to be thinking about in leases.

 

Anchorage Board of Equalization — Property Taxes

Jolly Roger of “Calico Jack” Rackham
Image in public domain

The annual right of passage for Anchorage property owners is the receipt in the mail of the Anchorage Board of Equalization green property appraisal card.  If you do not agree with the property value as assessed you may appeal the valuation.  You may appeal on the grounds that the appraisal is “unequal, excessive, improper or under evaluation.” Continue reading “Anchorage Board of Equalization — Property Taxes”

A Negligence Primer — Good Samaritan Defense

This was originally written for my EMS friends, but the basic concepts still apply:  duty, breech, causation, and damages.

Setting the stage:  It’s 3am (of course), and you just laid down after watching a Star Trek – The Next Generation marathon when the tones go off, and the dispatcher announces another of a long line of winter vehicle rollovers.  Blah, blah, blah, icy roads and drunk drivers.  Wind and snow, minor extrication, neck pain and minor bleeding from the head, the patient intoxicated but friendly.  C-collar, the requisite uncomfortable backboard, and couple of big IVs just because, and a quick drop off at the local ER.  The next afternoon you hear the patient began seizing shortly after you left the ER, and died a short time later from a massive subdural.  Three years later you get the summons and complaint, naming you, your partner, your duty supervisor, your service, the hospital, the ER Doc, the radiologist, and the high school janitor as defendants in a lawsuit claiming negligence.

First, let’s dispense with the Good Samaritan defense.  You were on duty and paid a decent hourly wage.  Therefore, you’re not covered under the statute.

Negligence in the common parlance simply means you screwed up and you should have known better.  However, in legal terms, “negligence” has a very specific meaning, and very specific elements that require evidence to reach the conclusion that someone is “legally” negligent.  If the plaintiff is unable to prove each element of negligence, then the defendant cannot be found liable.

In order to be legally negligent, the plaintiff must show that the defendant had a duty to act (duty), that the defendant failed to follow the standard of required conduct (breach), that the failure was the cause of harm to the victim (causation), and that actual harm resulted (damages.)  These four elements: duty, breach, causation, and damages, must all be proven in order to prevail.  The Good Samaritan statute, which all EMTs seem to consider when thinking of negligence, speaks to two levels of negligence – simple negligence and gross negligence.  Outside of this narrow statute, however, the level of egregiousness is relevant only in the amount of punishment given.

Let’s flesh out this discussion a bit.  “Duty” is the easy one – did you have a duty to provide care to the patient.  Yes or no.  In the above case, for example, you were on duty and being paid to respond.  Therefore, yes, you had a duty.  This is the easiest of the four elements to prove, or to defend.  You’re off duty and drive past an accident scene which already has numerous responders present.  No duty, no negligence claim.  Volunteers can sometime have a bit more difficult time, but the standard becomes whether you in any way held yourself out at the time of the event to be available to respond.  If you were “on call,” duty attaches, if not, duty likely does not attach.

“Breach” is slightly more difficult to prove, but still often relatively easy.  Did you do (or not do) something beyond or outside the industry standard?  In other words, did you breach your duty to treat a particular illness or injury in an appropriate manner?  This is gross simplification, of course, because evidence would be required at trial about what, exactly, was the “standard of care” required in the given circumstance.  This makes this particular element the most wishy-washy, as dueling experts vie for the attention of the judge or jury.

“Causation” is the often missed elements by the lay public.  This means that your actions, or inactions, actually caused the harm being alleged.  If your patient was hit in the head by a pipe wrench, and you later drop him injuring his knee, you’re only responsible for the knee injury, not the whole shebang.  This can often be difficult to determine.  For example, a COPD patient presents with severe respiratory distress.  You provide high flow oxygen, but not CPAP; when the patient continues to deteriorate you elect to sedate and intubate, causing dental trauma, increased swelling to the throat and worsening of the distress.  The patient eventually arrests due to extreme hypoxemia.  How much was your fault, if any?  Would she have continued to deteriorate regardless of your actions?

“Damages” is reasonably straight forward, if the above elements have been met and determined.  First, were there actual injuries that caused harm to the patient?  It’s the “no harm, no foul” rule of negligence.  You should have given Amiodarone, not lidocaine, for an SVT according to your medical standing orders.  But the patient persevered and lived despite your best efforts.  You had a duty to act, you breached that duty, but you did not cause compensable harm.  While you may be on the soup line because you dangerously violated your standing orders, at least you won’t end up in court.   However, if actual harm was caused by you, then you are responsible for those damages.

One can be negligent in the common sense but not be legally negligent.  While this may be of little real comfort, EMTs should have a basic understanding of the general concepts of legal negligence.  As for the scenario mentioned above?  A good attorney will bring in a lot of questions.  Was the alcohol masking signs and symptoms of head trauma the EMTs and hospital should have recognized earlier?  Should the patient have been taken to a trauma center rather than just the local ER?  Did the EMTs adequately describe for the ER staff the circumstances surrounding the crash such that the physician and staff could better assess the totality of the patient’s potential injuries?  Obviously there aren’t enough details to make any reasoned response, and in the end it may take a judge or jury to flesh out all the answers.  Such is the nature of the legal world.

Alaska Eminent Domain

Alaska Statutes address Eminent Domain at 09.55.240 through .460.  When a governmental entity makes a taking, there are actually two portions to the valuation process.   First, the taken parcel’s value and the remaining parcel’s diminished value.   The government will  focus the target’s attention solely on parcel taken.  Typically people will forget to consider the affect to the remaining parcel.

Government offers frequently select valuation methods that support low prices.  For example they will suggest that vacant land value should be measured by a gross proportion of the whole.  By measuring the property as a percentage of gross they pay the lowest cost on the valuation.

I advise against providing the entity with a right of entry on the premises prior to resolving the property valuation and damages issues.  Absent a project deadline the entity has no pressure related to making a full and fair offer on the property.  You will generally fair better by withholding the right of entry permit.  The following provides a summary of a few of the important provisions in Alaska.

Valuation Date

 

  1. The valuation date for the taking is the day the government enters the property and begins construction.  Alaska Stat. 09.55.280. Wickwire v. City & Borough of Juneau, 557 P.2d 783 (Alaska 1976).
  2. The taking “. . . shall be located in the manner that will be most compatible with the greatest public good and the least private injury. . .”  Alaska Stat. 09.55.280.
  3. If the property boundaries change at all, the agency must apply for and obtain a preliminary replat approval before the acquisition and then shall also obtain a final plat.  Alaska Stat. 09.55.275.

Hearings

  1. If you object to the taking, the extent of the taking, the value of the consideration paid, the manner or nature of crossings you have a right to a hearing before the court.  Alaska Stat. 09.55.300.
  2. You have a right to a jury trial as to damages and the value of property.  Alaska Stat. 09.55.320.
  3. If you do not reach an agreement on value and damages then in a court action value is established on the day the suit is filed.  Alaska Stat. 09.55.330.
  4. If those attempting to condemn the property file an action, they may also seek an order to allow them to take possession before the value is determined.  Alaska Stat. 09.55.380.  When they do this then they must also pay interest from the date of suit until the final value determination.  Alaska Stat. 09.55.330.
  5. If there is a hearing and judgment rendered, the entity taking the property must pay within 30 days of judgment.  Alaska Stat. 09.55.350.
  6. If they fail to pay then you are entitled to vacate the condemnation award.  Alaska Stat. 09.55.360.

Damages

  1. When the state takes a parcel you are entitled to the value of the parcel and all the appurtenances on the parcel.  Alaska Stat. 09.55.310(a)(1)
  2. When the state takes only a portion of a larger parcel you are entitled to the damages related to the remaining parcel that they failed to take.  Alaska Stat. 09.55.310(a)(2).
  3. When the benefit of the state’s investment to a parcel not taken, exceeds the damages to the remaining parcel, you only get the value of the parcel taken.  Alaska Stat. 09.55.310(a)(3).
  4. As far as practicable, compensation shall be assessed for each source of damages separately.  Alaska Stat. 09.55.310(b).
  5. Alaska has very little settled case law on the sources and methods of establishing other damages.  The list from other jusidictions can be very long.  Some of the more common Damages Sources include:
    1. Just compensation for real estate that is taken;
    2. Severance damages to property impacted, but not directly taken;
    3. Tenant lease value damages;
    4. Property and business fixture damages;
    5. Loss of going concern damages when a business is destroyed by a taking;
    6. Residential and homeowner relocation damages;
    7. Business relocation damages;
    8. Highway and right-of-way accesses damages;
    9. Construction related damages;
    10. Minimum compensation damages to make business owners whole;
    11. Diminution of value damages in land use cases;
    12. Attorney’s fees payments to landowners; and,
    13. Loss of land development potential damages.

To establish the individual components of each of these elements of damages you will need to have admissible evidence.  The evidence will need to be reasonably certain in the measurement of the damages.  You typically will need to enlist the services of not only counsel but, appraisers, site analysts and engineers to evaluate and present evidence supporting the value of these damages.

 

Valuation

  1. Valuation is based on “fair market value” or the price a willing buyer would pay a willing seller for the property.  State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  2. Value is established by what the owner has lost and not what the condemner gains.  Gacksetter v. State, 618 P.2d 564 (Alaska 1980) (owner of residential property lost residence and value was set based on that loss not on the value of the gravel pit developed after condemnation).
  3. Owner’s loss in value does not include the value of the project giving rise to the project.  But, if the taking is unrelated to another project that adds value to the owner, the owner does capture the other projects value.  See, e.g., State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  4. Owner’s improvements made in anticipation of condemnation is ordinarily not relevant or admissible even with knowledge of the prospects of taking; unless, the improvements are made solely to enhance their award.  Babinec v. State, 51 P.2d 563 (Alaska 1973) rev’d on other grounds, 586 P.2d 966 (Alaska 1978).
  5. Valuing a larger parcel generally results in a lower value.
  6. Severence Damages

Attorney’s fees and experts

You are not entitled to be compensated for your experts or your counsel unless the fact finder determines that the value the government offered you was more than 10% less than the value they should have offered to you.  This rule pretty much guarantees that the government is always going to take your property at a discount to the actual full and fair value.

Alaska AHFC Energy Rebate should Not Be Taxable

Q. IS THE AHFC HOME ENERGY REBATE TAXABLE INCOME? I HEARD THAT I WILL RECEIVE A 1099 FORM FROM AHFC.   AHFC has received a legal opinion from the State of Alaska Department of Law that requires AHFC to issue a 1099-G to individuals who receive payments under this program. It is up to the recipient to contact their tax advisor about any possible tax consequences. – See more at: .  Indeed AHFC reports the amount in block 6 and reports the amount as a “taxable grant.”

The Internal Revenue Code provides for the exclusion from income of Energy conservation subsidies provided by public utilities under 26 USC § 136.

(a) Exclusion

Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.
(b) Denial of double benefit
Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any subsidy which was provided with respect to such expenditure. The adjusted basis of any property shall be reduced by the amount excluded under subsection (a) which was provided with respect to such property.
(c) Energy conservation measure
(1) In general
For purposes of this section, the term “energy conservation measure” means any installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.
2) Other definitions
For purposes of this subsection—

(A) Dwelling unit

The term “dwelling unit” has the meaning given such term by section 280A (f)(1).
(B) Public utility
The term “public utility” means a person engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers. For purposes of the preceding sentence, the term “person” includes the Federal Government, a State or local government or any political subdivision thereof, or any instrumentality of any of the foregoing.
(d) Exception
This section shall not apply to any payment to or from a qualified cogeneration facility or qualifying small power production facility pursuant to section 210 of the Public Utility Regulatory Policy Act of 1978.
Other Precedent
There are no reported decisions as of the date of this post.  There are only three private letter rulings regarding the statute and its application.  The letter agreements can only be relied upon by the parties that obtained the letter rulings.  However, at least two of those letter rulings support the finding that Alaska Homeowners should not be paying tax on the AHFC energy rebates.  The other ruling appears to not be relevant.

Utility customers participating in test of “smart grid” technology utilizing new solar photovoltaic system to be installed in homes by taxpayer utility were not required to include value thereof in income per IRC § 61 because same was excludable as IRC § 136 “energy conservation measure;” nor was IRC § 6041 information reporting required. Private Letter Ruling 201046013, 2010 PLR LEXIS 2352.

As IRC § 136 did not apply to homeowner who received one-time renewable energy credit from utility upon installation of residential renewable energy system, homeowner was required to include gain from sale of associated environmental credits and benefits triggered by resulting electricity generation in income and to credit for 30% of expenditure. Private Letter Ruling 201035003, 2010 PLR LEXIS 1080.

Payments to residential customers by exempt entity to promote energy efficiency through state program were not income to recipients under I.R.C. § 61 but were energy conservation subsidies excluded under section 136; because payments were not income to customers, entity did not have to report payments under section 6041. Private Letter Ruling 200717010, 2007 PLR LEXIS 93.

It would be nice if AHFC would obtain a private letter ruling establishing that Alaska homeowners are not liable for taxes on the AHFC Energy rebate.  The cost of the letter agreement exceeds the benefit to any single homeowner.  But, AHFC would establish a lot of good will and keep more money in Alaska instead of shipping it off to DC.  Instead, they issue the 1099 and give you the following advice.  The IRS also provides advice here.  

The U.S. Treasury Department requires us to advise you that this written advice is not intended or written by our firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to Federal tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer, other than the recipient of the written advice.