OPINION
Before RABINOWITZ, C. J., CONNOR, BURKE and MATTHEWS, JJ., and DIMOND, Senior Justice.
CONNOR, Justice.
The principal issue in this case is whether lands that were originally granted to the state by the federal government for the support of the University of Alaska may now be used for other public purposes. The state contends that university lands can be included in Chugach State Park without paying compensation. The superior court held that the inclusion of the university lands in the state park constituted a breach of trust and invalidated the portion of AS 41.20.210 which included the university land in the park. It awarded substantially full attorney’s fees to the university.
We conclude that the trial court was correct in holding that it was a breach of a federal trust to include university land in the park without compensation, but we conclude that invalidating the statute was error. The proper remedy in this case is to award compensation to the university. We also hold that it was improper to award substantially full attorney’s fees to the university.
I. Facts
The facts in this case are not in dispute. A group of real estate developers (Village Developers,
et a 1.)
wished to build a housing development known as Innsbruck Village. All the proposed land for the development, consisting of about 710 acres, is a privately owned inholding within the boundaries of Chugach State Park. Between this enclave of private land and the park boundary are two sections of land designated as Sections 11 and 14 of Township 15 North Range 1 West, Seward Meridian. In 1961, the state received the patent to the bulk of the land in these two sections
from the United States under the authority of the Act of January 21, 1929, ch. 92, 45 Stat. 1091 (1929), which allows the state to select 100,-000 acres of vacant unreserved land from the federal domain for the “use and benefit” of what is now the University of Alaska. This is not land to be used as the site of a university campus; rather, it is an asset of the university to be used for its support through its retention and use or its eventual sale.
The real estate developers wished to widen and reroute a portion of a then existing road that provided the only access into the private land. This road cuts across the two sections of university land. In July, 1977, the developers applied to both the university and the state Department of Natural Resources for permission to do the road work. The university granted its permission in December, but on April 5, 1978, the Department of Natural Resources denied its permission.
At the time the state denied its permission, a survey crew employed by the developers had already been on the road for several days and had cut some trees and brush. On April 12, the state filed a com
plaint seeking an injunction halting any further work, a declaratory judgment that the developers were trespassing, and damages.
The developers, in their answer and a motion for partial summary judgment, stated among other defenses and counterclaims that the court should not permit the state to treat the university land as park land. The state, in opposing this contention, maintained that the land belonged to the state, the legislature had included the land in Chugach State Park, and therefore it had to be managed in a manner compatible with park land. The state further took the position that the Board of Regents of the university had no power to force the state to grant a right of way over this land and that the university’s permission to the developers had no effect.
At a hearing on the summary judgment motion, the court decided to permit the University of Alaska to intervene as a party. The court was concerned that any decision regarding the relatively minor dispute between the developers and the state over a piece of road construction could have a far-reaching effect on the future management of university lands. When the university intervened as a defendant, it sought a declaratory judgment not only as to the land specifically involved in the road dispute, but also as to the total 5,040 acres of university land included in Chugach State Park.
In a memorandum decision, the trial court concluded, first, that the land granted to the university continued to be retained in trust for the university under the federal grant; second, that by placing the university land in Chugach State Park the state violated the purpose of the trust; third, that under Alaska law, the Board of Regents must be consulted whenever there is a disposition of land, and there was no approval by the Board to place this land in a state park; and forth, that when the Board of Regents seeks a disposal of its land, as was done in this case by approval of the road building plan, the state Department of Natural Resources must acquiesce, and carry out the disposal as a ministerial duty. The trial court’s ultimate conclusion was that the university lands were not part of the Chugach State Park because' the legislature’s enactment including the lands in the park was invalid. A final order to this effect was entered.
The state has appealed from the court’s judgment. After the court entered its final order, the state and the developers settled. The only remaining dispute is between the university and the state.
II. Violation of Federal Trust
The state’s principal argument in this appeal is that the grant of 100,000 acres of federal land for the support of higher education in the Territory of Alaska under the 1929 Act is no longer restricted to the narrow purpose envisioned by that Act. While the state recognizes that the 1929 Act originally required university lands to be managed solely for the benefit of the university, the state apparently now believes that these lands may be managed with multiple objectives in mind, some of which may be compatible with the support of the university and some which may not be compatible. It does not believe that the university must be compensated for placing the land in the state park. The state’s reasoning is based on the action of Congress, which has repealed certain sections of the original 1929 land grant.
A review of the subsequent history of the 1929 land grant shows that the state’s argument is without support. We agree with the trial court that putting university lands into a state park without compensation to the university was a breach of the trust.
A. The 1929 Act.
The 1929 Act originally consisted of seven sections. The first, which is still in effect, is a habendum clause describing the size of the grant and its purpose. In particular, it
states that the land is granted “for the
exclusive
use and benefit of the Agricultural College and School of Mines” (now the University of Alaska) (emphasis added). Section 2 of the Act, which is also in effect, states that the land grant cannot be used for the support of any religious institution. The remaining five sections, which are now repealed, contained detailed provisions relating to the sale or disposal of land. For example, they required that land be sold to the highest bidder at a public auction, that timber and other products from the land be sold at their appraised value, and that funds derived from the sale of lands be held in trust. Transactions in violation of the Act were “null and void,” and the Attorney General of the United States was empowered to enforce the Act.
Language which is nearly identical to that contained in sections 8 through 7 of the 1929 Act appears in sections 10 and 28 of the New Mexico-Arizona Enabling Act, ch. 310, 36 Stat. 557 (1910), which makes grants of extensive amounts of federal land for school purposes to those states. The reason for these provisions in the New Mexico-Arizona Enabling Act was explained by the United States Supreme Court in
Lassen v. Arizona,
385 U.S. 458, 463-64, 87 S.Ct. 584, 587, 17 L.Ed.2d 515, 520 (1967):
“All the restrictions on the use and disposition of the trust lands, including those on the powers of sale and lease, were first inserted by the Senate Committee on the Territories. Senator Beveridge, the committee’s chairman, made clear on the floor of the Senate that the committee’s determination to require the restrictions sprang from its fear that the trust would be exploited for private advantage. He emphasized that the committee was influenced chiefly by the repeated violations of a similar grant made to New Mexico in 1898. The violations had there allegedly consisted of private sales at unreasonably low prices, and the committee evidently hoped to prevent such depredations here by requiring public notice and sale. The restrictions were thus intended to guarantee, by preventing particular abuses through the prohibition of specific practices, that the trust received appropriate compensation for trust lands.” (footnotes omitted).
The nearly identical language used in the grant of land to the Territory of Alaska was undoubtedly placed in the Act to prevent the same kind of abuses by the territorial government.
The State of Alaska acquired the rights to the land granted by the 1929 Act by section 6(k) of the Alaska Statehood Act, Pub.L.No.85-508, 72 Stat. 339 (1958), which provides in relevant part:
“Grants previously made to the Territory of Alaska are hereby confirmed and transferred to the State of Alaska upon its admission.”
Article XII, section 13, of the state constitution provides that any land taken by the state under a federal grant will be accepted under the “terms or conditions of the grants.”
In
Wessells v. State Department of Highways,
562 P.2d 1042, 1051 n.34 (Alaska 1977), we recognized that acceptance of grants of school lands under this section created a trust with the state acting as trustee.
B. The 1966 repeal.
In 1966, the United States Congress repealed sections 3 through 7 of the 1929 Act. Pub.L.No.89-588, 80 Stat. 811 (1966). The state asserts that this repeal means that there are no longer any federal restrictions on the use of the land granted under the 1929 Act. Its principal contention is that the repealing of section 3 of the Act removed any federal trust obligations. Section 3 had provided, in part:
“[I]t is hereby declared that all lands granted to said Territory are hereby expressly transferred and confirmed to the said Territory and shall be by the said Territory held in trust .. . . ”
The state concludes that, once this language was repealed, the state could establish its own guidelines for how the land should be used.
The legislative history of the repeal, the history of the school land grants in general and the plain wording of the habendum clause of section 1 make this theory of the state unsupportable.
First, it is abundantly clear from the legislative history that Congress was willing to repeal sections 3 through 7 of the 1929 Act because it was satisfied that Alaska had adequate procedures in its own statutory law to prevent the type of abuses that the repealed sections were designed to prevent. In particular, it should be noted that in its first session in 1959, Alaska’s new state legislature enacted a bill that provided for the disposal of public lands and resources along principles nearly identical to those contained in sections 3 through 7 of the 1929 Act. Like the 1929 Act, the state law required that lands and resources be sold to the highest bidder.
See
Ch. 169, art. IV, § 2, and art. VI, § 3, SLA 1959. In floor debates on the bill, Representative Rivers from Alaska was asked by one of his colleagues to clarify that Alaska had adequate procedural safeguards to manage university lands. Because of Alaska statutory law, Representative Rivers could assure him that such protections existed. It hardly seems possible that Representative Rivers intended to convey the message the state now asserts, that in fact the state would be free to use university lands for any purpose which it saw fit under some broad concept of the “public interest.”
Second, the state’s argument fails to appreciate that, if Congress had intended to allow land to be used for other than university purposes, this would have signaled a major shift in federal land policy. The statehood enabling acts of at least nine other western states contain allocations of acreage for school trust lands totaling approximately 40 million acres.
See
Note,
Compensation for Highway Easements Over School Trust
Lands, 42 Wash.L.Rev. 912, 912 n.5 (1967). In 1962, Arizona’s legislature petitioned Congress to modify is enabling act so that municipalities could use school trust lands for parks, schools and other public purposes and compensate the trust at less than fair market value. Bills introduced by the Arizona congressional delegation failed to pass both houses.
See
Udall,
Arizona’s Public Lands
— Mixed
Blessing, Mixed Burden,
8 Ariz.L.Rev. 11, 13 (1966). It does not seem reasonable to conclude that Alaska, alone among western states, was to be treated so differently.
Finally, it is clear that the language of the 1929 Act that was not affected by the 1966 repeal continues to impose a trust obligation upon the state. As noted above, the habendum clause, which remains in effect, continues to require that the land be used
for the “exclusive use and benefit” of the university.
C. The trust violation.
Because the land was to be held in trust for the university, we must determine whether inclusion of the land in Chugach State park caused a breach of the trust. The trial court concluded that the inclusion of university land in the park violated the trust provision of the federal grant. We agree. The use that can be made of park lands as compared to state lands in general is severely restricted. Trees may not be cut, minerals may not be removed, nor can the land be used for raising farm animals. The general principle is that park lands are to be managed in a way that will increase “the value of a recreational experience.”
It is apparent that this objective is incompatible with the objective of using university land for the “exclusive use and benefit” of the university. The implied intent of the grant was to maximize the economic return from the land for the benefit of the university. This intent cannot be accomplished if the use of the land is restricted to any significant degree.
It is well established in private trusts that “[i]t is the duty of a trustee to administer the trust solely in the interest of the beneficiaries.” II A. Scott, The Law of Trusts § 170, at 1298 (3d ed. 1967).
See
G. Bogert, The Law of Trusts and Trustees § 541, at 157 (rev. 2d ed. 1978).
Lassen v. Arizona,
385 U.S. 458, 87 S.Ct. 587, 17 L.Ed.2d 515 (1967), makes clear that the same private trust law principles are to apply to federal land granted to the states for school purposes.
Lassen
involved the question of whether and how much compensation must be paid by a state when it uses school lands for a highway right of way.
The Court noted that the enabling act granting the school land “unequivocally demands ... that the trust receive the full value of any lands transferred from it.... ” 385 U.S. at 466, 87 S.Ct. at 588, 17 L.Ed.2d at 521. Further, the intent of Congress was that “the grants provide the most substantial support possible to the beneficiaries and that
only
those beneficiaries profit from the trust.” 385 U.S. at 467, 87 S.Ct. at 589, 17 L.Ed.2d at 522 (emphasis added).
As noted in a more recent Supreme Court case,
Alamo Land & Cattle Co. v. Arizona,
424 U.S. 295, 302, 96 S.Ct. 910, 915, 47 L.Ed.2d 1, 8
(1976), the ultimate conclusion of
Lassen
is that “even where the State itself is the acquisitor, the Act’s designated beneficiaries were to derive the full benefit of the grant.”
The state conjectures that there may still be an economic return from these lands because at some point in the future the Department of Natural Resources may allow ski tows or concession stands to be placed on them. The Supreme Court in
Lassen
rejected this type of speculation about the possible future value of land. The Arizona Supreme Court had concluded that it was safe to presume that a highway always increases the value of adjacent lands in an amount equal to the value of the right of way that has been taken. The United States, as amicus curiae, had suggested that, instead of using a presumption, any compensation paid into a trust be reduced by any proved enhancement. The Supreme Court rejected both arguments and concluded that the school trust had to be compensated for the actual appraised value of the land taken.
From the foregoing discussion, we conclude that the state has breached the trust by not compensating it for the value of the university land included in the park. The appropriate remedy is discussed in detail below.
III. Legislature’s Power to Dispose of University Lands
As discussed above, the trial court concluded that the disposal of university land without compensation violated a trust created by the 1929 Act. The court further concluded, however, that the state legislature had no power to dispose of university land without the express permission of the Board of Regents. The court reasoned that AS 38.05.030(a) prevents any disposal of university lands by the Commissioner of Natural Resources without the approval of the Board of Regents, and, because this was a disposal of land without the Board’s approval, it was invalid.
While we agree with the trial judge’s conclusion that this was a “disposal” of land, we conclude that AS 38.05.030(a) only covers disposals of land by the Commissioner of Natural Resources.
The creation of Chugach State Park was a disposal by the legislature, not by administrative action, and therefore AS 38.05.030(a) is inapplicable.
The university argues, on the basis of article VII, section 2, of the Alaska Constitution, that the legislature cannot control university land. That section provides:
“The University of Alaska is hereby established as the state university and constitutes a body corporate. It shall have title to all real and personal property now or hereafter set aside for or conveyed to it. Its property shall be administered and disposed of according to law.”
The trial court concluded:
“The apparent intention of the framers of the Constitution was to insure that the University had legal title to all land and property actually utilized by it in its educational capacity.”
This is a reasonable interpretation of the section, and in fact the legislature has given
title to lands in the area of the Fairbanks campus to the university. Ch. 182, § 3(c), SLA 1978. Moreover, the university takes any land it may have title to “according to law.” As the state points out, only the legislature can make laws effecting the disposal of land, not the Board of Regents,
so even if the university did have title to the land, the legislature would still be empowered to dispose of it.
The only veto power the Board of Regents has over disposals of land is defined by statute. Consequently, we believe that the legislature was free to dispose of this land without obtaining the approval of the university. In any event, as the federal patent makes clear, the state, not the university, was the grantee.
The natural resources article of the Alaska Constitution grants extensive powers to the legislature to control state lands. Article VIII, section 2, provides that
“The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.”
It is clear that these lands “belong” to the state. Additionally, article VIII, section 7, provides for reserving from the public lands areas which have recreational value.
The university objects to this interpretation of the natural resources article which allows the legislature wide latitude of control over its lands. It contends that it allows politics to intrude into the management of university affairs. However, if the trust fund for university lands is fully compensated at the appraised value of the property, as
Lassen
requires, it is difficult to imagine how the legislature can have any impact on university policy or academic freedom.
Thus we hold that the legislature had the power to dispose of the land in question.
IV. Remedy
The trial court held that the portions of AS 41.20.210(11) which included university land in the park were invalid, and rejected the remedy of inverse condemnation and either monetary damages for the taking of the university land or an exchange of lands having an equal fair market value. In the trial court’s view, the remedy of inverse condemnation would result in the judiciary “injecting itself unnecessarily into the political sphere” and could force an unanticipated allocation of resources by the state.
While there is some merit to the argument in the context of a private damage action, we believe that it is inapplicable in this case. If damages are awarded here, it will, at the most, involve a transfer of either lands or funds from one governmental entity to another. Moreover, the legislature has nearly total control over appropriations to the university. Thus, there is no issue of the allocation of resources between the private and public sectors.
It is also logical to assume that the legislature intended to compensate the university for the loss of its land. This view gives the statute creating Chugaeh State Park a reading that is in accord with the well recognized canon of statutory construction that, when possible, legislation should be construed in a way that upholds its validity.
See
1 C. Sands, Sutherland Statutory Construction § 2.01 (4th ed. 1972).
The New Jersey Supreme Court based a decision on this rationale in
Lomarch Corp. v. Mayor of Englewood,
51 N.J. 108, 237 A.2d 881 (1968). Rather than declare a statute that provided for reserving private land for parks invalid, the court concluded that the statute should be construed in such a way that it required compensation, even though the statute and a municipal ordinance enacted under it did not mention the subject.
Cf. Maryland-National Capital Park & Planning Commission v. Chadwick,
286 Md. 1, 405 A.2d 241, 250 (1979) (striking down a plan similar to New Jersey’s on the ground that the regulation constituted a taking and was therefore unconstitutional in that it failed to award any compensation). We do not decide whether we will follow
Lomarch
in an action by a private property owner
but we do find its reasoning appropriate in this case where no private damage actions are involved.
Thus, it is necessary to remand this case to determine the value of the lands taken. We conclude that the university should receive the full appraised value of the land that was placed in the park. The applicable date on which the fair market value of the land should be determined is the date the Chugaeh State Park act was enacted. This is in accordance with our holding that the statute which created Chugaeh State Park required compensation, and with our decision in
City of Anchorage v. Nesbett,
530 P.2d 1324, 1334-36 (Alaska 1975). Finally, we believe the parties should be given an election to pay monetary damages or arrange a mutually agreeable land exchange.
V. Attorney’s Fees
Following judgment, the university moved in the superior court for an award of $16,196.00 in attorney’s fees incurred in defending the underlying action. The court granted a partial award of $15,000.00. The state raises numerous objections to the court’s award of attorney’s fees: that the university waived its right to recover attorney’s fees by failing to comply with the requirements of Civil Rule 79(a) that a cost bill be filed within ten days of judgment, and by failing to set forth the charges incurred with sufficient particularity; that the court’s award of substantially full attorney’s fees was unreasonable and an abuse of discretion; and that one state agency should not be ordered to pay attorney’s fees to another state agency.
Initially, the state argues that the trial court erred in refusing to apply the requirements of Civil Rule 79(a) to the university’s request for attorney’s fees. Civil Rule 79(a) provides in part:
“Within 10 days after the entry of judgment, a party entitled to costs shall serve on each of the other parties to the action or proceeding a cost bill, together with a notice when application will be made to the clerk to tax costs. The cost bill shall distinctly set forth each item claimed in order that the nature of the
charge can be readily understood.... Failure of a party to serve a cost bill and notice as required by this subdivision shall be construed as a waiver of his right to recover costs.”
The state contends that the university waived its right to recover attorney’s fees by its failure to comply with the requirement that a cost bill be served within ten days of judgment. The university filed its request for attorney’s fees in the superior court thirteen days after judgment. The trial court ruled that it would be unfair to treat any delay in filing the motion for attorney’s fees as a waiver (citing Civil Rule 94), given the established position of the superior court in the Third Judicial District that the procedures in Rule 79 do not govern Rule 82 motions for attorney’s fees.
We have never directly addressed the question of whether a request for attorney’s fees is governed by the procedural requirements of Rule 79. However, on two occasions we have intimated that Rule 79 does not govern attorney’s fees, by considering the issue of attorney’s fees after holding that the right to recover costs was waived for failure to establish compliance with Rule 79(a).
See Curran v. Hastreiter,
579 P.2d 524 (Alaska 1978);
M-B Contracting Co. v. Davis,
399 P.2d 433 (Alaska 1965).
We conclude that, while attorney’s fees are costs,
they are not covered by the literal requirements of Civil Rule 79(b).
It is within the discretion of the trial court to impose a time limit for the filing for attorney’s fees. The trial court did not abuse its discretion in this case by permitting the request thirteen days after the judgment.
When granting attorney’s fees, the. trial court indicated that the amount requested by the university, $16,196.00, was reasonable due to the high quality and extensive nature of the work required, but it felt constrained by this court’s decisions to grant only a partial award. The state contends that the amount awarded, $15,000.00, provides “substantially full attorneys fees” and is per se unreasonable. In
Moses v. McGarvey,
614 P.2d 1363, 1370 (Alaska 1980), we stated that “complexity may be considered in determining the amount to be awarded, but that factor alone does not justify the award of full fees.”
We have consistently held that an award of full attorney’s fees is “manifestly unreasonable” in the absence of a bad faith defense or vexatious conduct by the losing party.
E. g., Davis v. Hallett,
587 P.2d
1170, 1171-72 (Alaska 1978);
Malvo v. J. C. Penney Co.,
512 P.2d 575, 587 (Alaska 1973). In
Stepanov v. Gavrilovich,
594 P.2d 30, 37 (Alaska 1979), an award of substantially full attorney’s fees was held to be “contrary to the philosophy expressed in Malvo....”
The attorney’s fees awarded the university are over ninety per cent of what it requested, and there is no evidence that the state’s claim was frivolous, vexatious or devoid of good faith. The award is excessive and must be reduced on remand.
Finally, the state suggests that the court is precluded from awarding attorney’s fees when both parties are state entities, claiming that the fees will ultimately come from the same fund. This argument was not presented to the superior court, and therefore it need not be considered. In any event, the argument is without merit. The university is a corporation of independent authority established by the Alaska Constitution, article VII, sections 2 and 3. It has the statutory power to “sue and be sued” in its own name, AS 14.40.040; and it is “an instrumentality of the sovereign which enjoys in some limited respects a status which is co-equal rather than subordinate to that of the executive or the legislative arms of government.”
University of Alaska v. National Aircraft Leasing, Ltd.,
536 P.2d 121, 128 (Alaska 1975) (footnote omitted). Attorney’s fees would be paid out of segregated appropriations given to each entity. Each entity has an interest in preserving its own funds, and the university, as the prevailing party, is entitled to an award of fees.
In conclusion, we affirm the trial court’s decision that the inclusion of university lands in Chugach State Park by statute, without compensation to the university, was a breach of the federal trust. We hold, however, that the court erred in invalidating the statute. The proper remedy is to permit an award in inverse condemnation. We also hold that the court erred in awarding substantially full attorney’s fees against the state.
AFFIRMED in part, REVERSED in part, and REMANDED.
BOOCHEVER, J., not participating.
