Village of Chefornak v. Hooper Bay Construction Co.

758 P.2d 1266, 1988 Alas. LEXIS 98
CourtAlaska Supreme Court
DecidedJuly 8, 1988
DocketS-2221
StatusPublished
Cited by22 cases

This text of 758 P.2d 1266 (Village of Chefornak v. Hooper Bay Construction Co.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Village of Chefornak v. Hooper Bay Construction Co., 758 P.2d 1266, 1988 Alas. LEXIS 98 (Ala. 1988).

Opinion

OPINION

BURKE, Justice.

Chefornak, a municipal corporation, contracted with Hooper . Bay Construction Company for the removal of boulders from the river channels used by Chefornak residents. 1 For reasons that are not apparent from the record, a dispute developed between the parties, and, on October 22,1984, Hooper Bay filed suit for breach of the contract. In its answer, the city denied any breach and alleged that the project was incomplete.

Dale Curda, Chefornak’s attorney at the time, deposed several witnesses and subsequently advised the city to settle the lawsuit. The city contends that at a regular city council meeting on August 18, 1985, the city council decided against settling.

Four days later, on August 22, 1985, Mr. Curda flew to Chefornak specifically to discuss the prospect of settlement with the *1268 city council. What happened at the August 22 meeting is hotly disputed. Mr. Curda contends that he carefully explained the potential ramifications of settlement, that all discussions were translated into Yupik for the non-English speaking attendees, that he explained that the sole purpose of the meeting was to discuss settlement, that those present advised him to settle, and that he left with no doubt in his mind that settlement was authorized. On the other hand, the city contends, via several affidavits of those present at the meeting, that the council members never agreed with Mr. Curda that the case should be settled. The city points out that, as Yupik-speaking people, they did not understand the exact purpose of the meeting. For example, one affiant stated that he does “not know what the word ‘judgment’ means.”

A month after this meeting, Mr. Curda signed a stipulation for entry of judgment against the city for $78,000 upon the terms to which he believed the city had agreed. A superior court judge entered final judgment in accordance with the stipulation. Mr. Curda states that he subsequently mailed copies of the final judgment and stipulation to Chefornak, and he began working to procure a state grant to help Chefornak pay the judgment. He was in close contact with the city, and advised it to submit a grant request. Nonetheless, the city did not do so. Chefornak did, however, give a check for $8,500, dated October 3, 1985, to Hooper Bay, and wrote on the check stub “payment for stipulated judgment between Hooper Bay Construction Co. and the Village of Chefornak.”

When Chefornak failed to make any further payments in accordance with the judgment, Hooper Bay’s successor-in-interest to the judgment 2 filed a “Motion for Relief in the Nature of Mandamus,” seeking to compel payment. In response, the city argued that the judgment could not be enforced because it violates the Alaska Constitution’s municipal debt restriction. Chefor-nak also moved to set aside the judgment (1) under Civil Rule 60(b)(4), on the basis that violation of the constitutional debt limit renders the judgment void; (2) under Rule 60(b)(6), for “any other reason,” based on a “complete lack of understanding and knowledge” of the judgment entered and the terms thereof; and (3) under Rule 60(b), for fraud on the court, based on the contention that Mr. Curda’s actions distorted the judicial process. The superior court granted Hooper Bay’s motion and denied Chefornak’s motion to set aside the judgment. Chefornak appeals. We affirm the trial court’s decision.

A. The Constitutional Debt Limitation

Article IX, section 9 of the Alaska Constitution provides:

No debt shall be contracted by any political subdivision of the State, unless authorized for capital improvements by its governing body and ratified by a majority vote of those qualified to vote and voting on the question.

Chefornak contends that, by entering into a settlement in the suit by Hooper Bay, the city obligated itself to pay $78,000, and thus “contracted a debt” in violation of this provision. It claims that to enforce the judgment would violate public policy. In addition, the city claims that the judgment is void and, under Civil Rule 60(b)(4), 3 unenforceable. . Hooper Bay, on the other hand, contends that article IX, section 9 applies only to debt financing and the incurring of bonded indebtedness, and is, therefore, *1269 inapplicable in the present context.

The question thus presented is whether a judgment entered upon a settlement stipulation is a “debt ... contracted” in the constitutional sense. Although we have never before interpreted this phrase, we note that every previous Alaska case involving section 9 has concerned bonding issues. See, e.g., North Slope Borough v. Sohio Petroleum, 585 P.2d 534 (Alaska 1978) (question of tax levy on borough’s debt service on general obligation bonds); Wright v. City of Palmer, 468 P.2d 326 (Alaska 1970) (question of whether bonds issued to encourage industrial development were valid); City of Juneau v. Hixson, 373 P.2d 743 (Alaska 1962) (question whether city’s issuance of bonds was for a “capital improvement”). Likewise, every Alaska case involving the parallel constitutional provision applicable to state debts has concerned bonding issues. 4 See, e.g., Thomas v. Rosen, 569 P.2d 793 (Alaska 1977) (question whether governor may exercise item veto as to general obligation bond issue).

In order to ascertain what the framers meant by “debt ... contracted,” it is useful to look at the minutes of the Alaska Constitutional Convention, which show clearly that Article IX, section 9 was intended to refer to a municipality’s right to borrow money. For example, after the reading of proposed article IX, one delegate stated that “section 9 and 10 ... seem[ ] to be a limitation on the right of the state to borrow money.” 2 Proceedings of the Alaska Constitutional Convention 1112 (December 19, 1955). Likewise, other delegates referred to sections 8 and 9 5 as “the one[s] on the matter of bonded indebtedness,” “a necessary safeguard against excessive bonding,” and the “basic rules [for state and local governments] before they can bond.” 3 id. at 2317, 2337, 2342 (January 16, 1956). Indeed, one version of section 9, adopted by the delegates prior to a subsequent stylistic change, provided that no debt would be contracted unless a “majority of the qualified voters of the respective political subdivisions approve the bond issue.” See 4 id. at 2423 (January 17, 1956) (emphasis added). Thus, we think it clear that the framers of our constitution intended section 9 to restrict a municipality’s ability to voluntarily borrow funds or issue bonds. We find no evidence of an intent to insulate cities from valid judgments.

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Bluebook (online)
758 P.2d 1266, 1988 Alas. LEXIS 98, Counsel Stack Legal Research, https://law.counselstack.com/opinion/village-of-chefornak-v-hooper-bay-construction-co-alaska-1988.