King v. Alaska State Housing Authority

• Decision Date: 27 July 1973
• Docket Number: No. 1613,1613
• Citation: 512 P.2d 887
• Parties: Earl S. KING and R. J. Cherrier, Appellants, v. ALASKA STATE HOUSING AUTHORITY, a public corporation, and J. L. Johnston, Appellees.
• Court: Alaska Supreme Court

Page 887

512 P.2d 887

Earl S. KING and R. J. Cherrier, Appellants, v. ALASKA STATE HOUSING AUTHORITY, a public corporation, and J L. Johnston, Appellees.

No. 1613.

Supreme Court of Alaska.

July 27, 1973.

H. Russel Holland, of Holland & Thornton, Anchorage, for appellants.

Clifford J. Groh & William A. Greene, of Groh, Benkert & Greene, Anchorage, for appellee Alaska State Housing.

Richard L. McVeigh, Anchorage, for appellee J. L. Johnston.

Before RABINOWITZ, C. J., and CONNOR, ERWIN, and BOOCHEVER, JJ.

OPINION

RABINOWITZ, Chief Justice.

In December of 1970, appellee Alaska State Housing Authority (hereinafter ASHA) issued an Invitation for Proposals for the sale and redevelopment of tracts G-1 and G-2 in the Eastchester Urban Renewal Project. Unsuccessful in their competitive proposal to purchase and redevelop tracts G-1 and G-2, Earl King and Rod Cherrier appeal from an involuntary dismissal of their suit to enjoin ASHA from conveying their tracts to the 'successful' developer, appellee J. L. Johnston.

ASHA is a 'public corporate authority' empowered to administer the Alaska Slum Clearance and Redevelopment Act. ¹ AS 18.55.700 in conjunction with AS 18.55.540 authorizes ASHA to 'sell, lease, exchange or otherwise transfer real property' in urban renewal areas, provided such transfer complies with an urban renewal plan approved by the governing body of the municipality in which the project is located. ² The Anchorage City Council approved an urban renewal plan in 1964 for the project involved in the case at bar. Pursuant to this plan and governing regulations, ³ ASHA invited proposals for the sale and redevelopment of tracts G-1 and G-2 according to the 'fixed price competition' method. Under this method, $126,000 was the fixed sale price of the land and ASHA's selection criteria emphasized economic feasibility, architectural quality, and planning aspects of redevelopment plans. The Redeveloper's Portfolio, containing materials necessary to submit proposals, advised prospective redevelopers that a good faith deposit equal to 5 percent of the purchase price was to accompany the proposal unless submitted by a non-profit corporation, limited dividend corporation, or cooperative. The Portfolio also advised that ASHA would afford limited preferential consideration to proposals submitted by redevelopers who owned property in the project area at the time the city council approved the urban renewal plan.

Appellants were the only former owners among the five redevelopers who submitted proposals, and they notified ASHA of their intent to exercise their preference on tracts G-1 and G-2. ASHA received appellants' proposal, accompanied by a good faith deposit, before the March 1, 1971, deadline. However, while ASHA received Johnston's proposal before the deadline, he did not submit the required deposit until March 30. After meeting with each of the proposed redevelopers, the ASHA Board of Directors concurred in the recommendations of the Federal Housing Administration and the ASHA staff, selecting appellee Johnston's proposal as the best plan for redevelopment of tracts G-1 and G-2.

After receiving notification of ASHA's decision, appellants sought to enjoin the housing authority from conveying the property to Johnston and to have themselves declared entitled to purchase and redevelop tracts G-1 and G-2. Appellants based their claim on three theories: that they are entitled to the property by virtue of an absolute 'preference right' as former owners; that Johnston's failure to submit a timely good faith deposit invalidated his proposal and required ASHA to reject it; and that ASHA abused its discretion in evaluation of appellants' proposal for redevelopment and purchase of the tracts in question. At trial at the close of appellants' case, the superior court granted appellees' motion for involuntary dismissal of the action 'on the ground that upon the facts and the law the plaintiff has shown no right to relief.' King and Cherrier appeal from this involuntary dismissal and attack the findings of fact on which it is based.

Resolution of the issues in this appeal rests in part upon interpretation of Alaska Civil Rule 41(b) which parallels Rule 41(b), Federal Rules of Civil Procedure, and which reads where pertinent as follows:

After the plaintiff has completed the presentation of his evidence, the defendant . . . may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. In an action tried by the court without a jury the court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). (Emphasis added.)

Previous opinions of this court prescribe the standards trial judges should apply to resolve Rule 41(b) motions to dismiss. In Rogge v. Weaver, ⁴ this court said that Rule 41(b) motions should not 'invariably' be resolved by a weighing of the evidence, but rather

where plaintiff has presented a prima facie case based on unimpeached evidence we are of the opinion that the trial judge should not grant the motion even though he is the trier of the facts and may not himself feel at that point in the trial that the plaintiff has sustained his burden of proof. ⁵

We subsequently held that in deciding Rule 41(b) motions the plaintiff's evidence should be viewed in its most favorable light. ⁶ Further in Trusty v. Jones, ⁷ this court articulated two policy rationales supporting the Rogge prima facie rule:

We believe the Rogge rule is more likely to achieve justice and reduce the number of appeals resulting from the application of Rule 41(b) than an interpretation permitting the judge to dismiss in close cases before he has heard both sides of the issues and has obtained a complete picture of the controversy.

Of the states which have adopted rules similar to Federal Rule 41(b), Alaska was the first to adopt the prima facie test. ⁸ However, the Supreme Courts of Florida and Wyoming have recently adopted the Rogge approach. ⁹ And commentators have concluded that Rogge is wholly consistent with the language of Rule 41(b). ¹⁰ Finally, because we find the policies behind Rogge as valid today as they were in 1962, we decline appellees' request to depart from the Rogge prima facie test in this case. With these principles in mind, we turn to appellants' three basic contentions in this appeal.

Employing alternative theories, appellants contend they presented a prima facie case establishing their absolute preference right to purchase and redevelop tracts G-1 and G-2 because no other proposed redeveloper formerly owned property in the project area. We reject each of appellants' alternative theories going to this point.

In this regard appellants first contend that ASHA is estopped to deny them an absolute preference because they invested funds to construct a redevelopment proposal in reliance upon representations from William H. Foster, ASHA local Relocation Property Manager. Testimony established that in 1966 and 1968 William Foster informed appellants they would have the right to reacquire property in the project area, provided they offered to pay the price set by ASHA. Foster did not advise them that their preference rights would be contingent upon ASHA's exercise of discretion in 'fixed price competition' situations, where criteria other than price determine the successful developer.

Foster's representations cannot bind ASHA, even if they 'misled' appellants, because ASHA was not empowered to grant an absolute preference right to former owners in the Eastchester Project area. ¹¹ Moreover, it is well established that all persons dealing with a public corporation, such as ASHA, are deemed to know its limitations. ¹²

ASHA may sell property only in accordance with an approved urban renewal plan. ¹³ With respect to preference rights, the approved urban renewal plan for the Eastchester project provides:

Owners of property within the project area whose property is acquired by the Alaska State Housing Authority will be given preferential consideration as redevelopers in the project area, if the Alaska State Housing Authority in its sole discretion determines-all other things being equal-that such owner's proposal for redevelopment is equal to or superior to proposals of other developers. (Emphasis added.)

AS 18.55.540(d) also limits ASHA's power to afford preference rights to those situations which the governing body has approved and under 'such rules, regulations, conditions and limitations as (ASHA) prescribes.' Prior to issuing the Invitation for Proposals involved in this case, ASHA promulgated regulations pursuant to AS 18.55.540(d) applicable to the development of tracts G-1 and G-2. Those regulations included a provision identical to that in the urban renewal plan. Rather than grant an absolute preference right, these regulations and the urban renewal plan merely reflect concern that ASHA give some consideration to whether the redeveloper was a property owner in the project area. Under these regulations former owners receive this limited preference only when their proposals equal all others with respect to criteria set forth in the Redevelopers Portfolio.

Appellants base their second alternative theory for an absolute preference upon a claimed denial of equal protection of the laws. ¹⁴ They assert that ASHA intended to afford more favorable preference rights to former owners submitting proposals to develop property in the Eastchester project other than tracts g-1 and G-2. And, they conclude that the Equal Protection Clauses of the Alaska and federal constitutions mandate that there be only one set of preference rights for the entire Eastchester project. This contention must be rejected because appellants have not demonstrated in what...