Triem v. Kake Tribal Corp.

• Docket Number: S-17767
• Decision Date: 17 January 2024
• Parties: FRED W. TRIEM, Appellant, v. KAKE TRIBAL CORPORATION and ARLENE HANSON, ET AL., Appellees.
• Court: Alaska Supreme Court

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FRED W. TRIEM, Appellant,
v.
KAKE TRIBAL CORPORATION and ARLENE HANSON, ET AL., Appellees.

No. S-17767

Supreme Court of Alaska

January 17, 2024

UNPUBLISHED See Alaska Appellate Rule 214(d)

Appeal from the Superior Court of the State of Alaska No. 1PE-90-00072 CI, First Judicial District, Petersburg, Daniel Schally, Judge.

Appearances: Fred W. Triem, Petersburg, for Appellants. Michael P. Heiser, Ketchikan, for Appellee Arlene Hanson.

Robert J. Misulich and Zachary T. Berne, Schwabe, Williamson & Wyatt, P.C., Anchorage, for Appellee Kake Tribal Corporation.

Before: Winfree, Chief Justice, and Maassen, Borghesan, and Henderson, Justices.

[Carney, Justice, not participating.]

MEMORANDUM OPINION AND JUDGMENT ^[*]

I. INTRODUCTION

This 32-year-old shareholder class action involves a village corporation formed pursuant to the Alaska Native Claims Settlement Act. After the corporation developed a financial plan distributing certain benefits to certain shareholders, several

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ineligible shareholders brought a class action alleging discriminatory payments. The trial court found for the class and after appeal awarded a substantial judgment.

Over time, shareholder opinions changed regarding the corporation's judgment debt to the class. The corporation underwent bankruptcy and lost business opportunities while carrying the judgment debt. Recently, the class voted to release the debt and to appoint a new representative. The class moved the court to approve these votes. The court interpreted the motion as a request for relief under Alaska Civil Rule 60(b)(5) and granted it. Concurrently, a class member and former class counsel moved to enforce the original judgment, and the court denied that motion.

The class member and former class counsel appealed, arguing among other things that the superior court lacked subject matter jurisdiction, that the court abused its discretion in granting the relief requested by the class, and that the court erred in awarding sanctions. We disposed of most issues in a prior order, but requested supplemental briefing regarding whether Alaska Civil Rule 23's requirements of class action settlements applied to the class's request for release of its judgment, and if so, whether the superior court's consideration of the class's request satisfied the Rule. We assume without deciding that Rule 23 applied, and we conclude that the superior court's treatment of the class's motion to release its judgment satisfied the Rule.

II. FACTS AND PROCEEDINGS

We detailed many of the underlying facts of this matter in Hanson v. Kake Tribal Corp.^[1] Here we set forth only the abbreviated facts and proceedings relevant to the issues remaining before us.

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A. Origins

In August 1990 a group of Kake Tribal Corporation (KTC) shareholders sued KTC.^[2] The group of shareholders, which eventually became the Hanson Class, challenged their ineligibility for KTC's elders' benefits programs due to having insufficient shares.^[3] Class representatives included original named plaintiffs Arlene Hanson and Clifford Tagaban, and class counsel was Fred Triem.^[4]

In 1993 the superior court granted summary judgment for the Hanson Class as a matter of law, holding that KTC's eligibility requirements for its elders' benefits program amounted to shareholder discrimination.^[5] The court structured a remedy for discriminated-against shareholders on a per-share basis (and excluding any shareholders who had actually participated in the benefits plan) with a total cost to KTC of $1,996,000, or $47.30 per participating share.^[6]

We affirmed KTC's liability to the Hanson Class in 1997.^[7] Then, the superior court awarded the Hanson Class total damages of $2,697,547.10 and costs of $8,056.49. The court also awarded Triem attorney's fees of one-third of the common fund recovered by the Hanson Class. During subsequent years, the Hanson Class judgment was partially satisfied through the release of a $1.8 million appeal bond and four additional partial payments.

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B. The Hanson Class Vote

Over time, KTC shareholder opinions changed. Burdened by class action debts, KTC had not only filed for bankruptcy but had also lost development opportunities. In recent years the class voted to relieve KTC of its outstanding debt to the Hanson Class and moved the superior court to discharge the debt.

KTC and a Hanson Class member also petitioned to remove Clifford Tagaban as class representative and Fred Triem as class counsel, which Tagaban opposed. The petition argued that their position in favor of maintaining the judgment debt was contrary to the interest of the Hanson Class, given the vote's outcome. After an evidentiary hearing, the superior court issued a detailed order analyzing the facts and interests at stake. Concluding that Triem and Tagaban no longer fairly and adequately represented the Hanson Class interests as required by Alaska Rule 23, the superior court ordered that Triem be removed as class counsel and that Tagaban be removed as class representative.

C. The Superior Court Approval

Three months after the vote, the Hanson Class moved the superior court "pursuant to Civil Rule 23(d)(1), to approve [the] Hanson Class vote to waive and forgive the remaining debt owed under the final judgment." The motion noted that the Hanson Class voted "99.98% in favor of forgiving the remaining debt owed under the judgment" and therefore expressly "waive[d] any further claim to the amounts still ow[ed]." It reasoned that "our people are living a life of subsistence and missing opportunities"; that "with the exception of Arlene Hanson we never started or agreed to the class action"; and that "it is no longer equitable that the 1998 judgment, which is over twenty years old, should have prospective application." KTC joined the motion, urging that relief was "necessary to wind up the lengthy reorganization and litigation process which has hampered [KTC] for the last three decades and prevented it from developing business opportunities for the benefit of its shareholders and Kake residents."

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Tagaban opposed. Among many other arguments, Tagaban largely contended that the superior court lacked subject matter jurisdiction, and alternatively that the superior court held no authority to provide relief from a judgment that we affirmed, particularly without a Rule 60(b) motion before it. He also argued that the motion for relief from judgment was untimely. Separately, Tagaban also had twice moved to enforce the final judgment. Like Tagaban's opposition, Tagaban's motion to enforce contended that the court lacked jurisdiction and that no Rule 60(b) motion had been filed. And the bulk of Tagaban's motion to enforce related to Triem's entitlement to an attorney's fees award from the class settlement common fund.

The Hanson Class representative replied to Tagaban's opposition. Among other arguments, the class representative questioned whether Tagaban truly represented any class members' interests or only Triem's, given that he cited no representations or affidavits from any class member seeking to oppose forgiveness of KTC's debt.

The superior court subsequently approved the Hanson Class's motion to forgive the debt and denied Tagaban's motion to enforce the judgment in two orders issued the same day. The court clarified that it considered all pleadings filed before it in reaching its decision to approve the class vote, notably including Tagaban's opposition and the Hanson Class's reply to Tagaban's opposition.

The court interpreted the Hanson Class's motion as one for relief from judgment under Alaska Civil Rule 60(b)(5). The court noted that the motion was brought less than three months after the class vote closed, which it deemed to be a reasonable amount of time. However, the court determined that KTC still owed Triem attorney's fees from the initial action and explained that "Triem shall be entitled to the same judgment creditor remedies and he shall be subject to the same conditions placed on those remedies . . . that the Hanson Class was entitled to."

But the court explained that Triem had already been paid much of his award, and ordered that "the parties and Triem shall file a numerical accounting of the remaining amount owed on the fee award, within two weeks." The order specified that

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Triem had not as of that time rendered a full accounting, and that he needed to do so and to "provide the court with the specific orders that authorized him to recoup the full amount he kept to cover costs." The court's order noted that if Triem did not explain the difference between his pro rata fee award and the amount he retained, the court would deduct it from the fee award.

Denying Tagaban's motion to enforce the judgment, the superior court held that neither Triem nor Tagaban were real parties in interest under Alaska Civil Rule 17^[8] and thus did not have the authority to bring the motion. The court held that the real party in interest was the Hanson Class as a whole, not any individual member. Along with rulings on Tagaban and Triem's standing, the court directly engaged with Tagaban's contentions raised in the motion to enforce the judgment including his position on the bankruptcy court reorganization plan and stipulation, the jurisdictional issues, and the issues related to payment of Triem's attorney's fees.

Triem then filed a second motion to enforce the judgment, purportedly on behalf of both Tagaban and the entire Hanson Class, which the court again denied. In this order, the court noted that "[t]he basis for [this] latest motion is dubious" since Triem no longer represented the Hanson Class, his "purported client Clifford Tagaban" was no longer class representative, and he had no authority as a real party in interest to enforce the final judgment in order to seek attorney's fees. And it observed that "before Triem can exercise any remedies the court would first...