Legislature(1997 - 1998)

03/02/1998 03:22 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 195 - COMMON LAW LIENS                                                      
Number 0037                                                                    
CHAIRMAN ROKEBERG announced the committee's first order of business            
was SB 195, "An Act relating to common law liens, to remedies,                 
costs, and fees imposed for the registration, filing, or recording             
of certain nonconsensual common law liens, and to penalties for                
recording common law liens."                                                   
Number 0052                                                                    
TIM BENITENDI, Legislative Assistant to Senator Tim Kelly, came                
forward to testify.  He gave the following synopsis of SB 195,                 
stating said the measure is designed to address the emerging                   
problem of the filing of nuisance liens in the form of retribution.            
Such liens have been filed against real and personal property owned            
by public officials and others who have been in disfavor with                  
certain groups and individuals who hold opposing viewpoints.  These            
non-consensual common law liens never have true commercial                     
foundation, but are used as a harassment tactic.  The practice has             
now surfaced in Alaska, as officials from the Municipality of                  
Anchorage can attest to.  Common law liens differ from lumbermen's             
liens, mechanics' liens, and the like, in that they do not relate              
to the substance of improvement of the property filed against.                 
Common law liens have dubious legal standing and were rare in                  
Alaska until recently.  They are non-specific claims being used                
when someone, or some group, feels its constitutional rights are               
being violated.  SB 195 would make it a misdemeanor to record an               
invalid non-consensual common law lien without court approval, it              
would ease the process of releasing a lien, and it would provide               
for the filing of a notice of invalid lien by an attorney of those             
public officials.  This legislation also sets out penalties against            
those who file such nuisance liens and provides for recovery of                
costs and damages from the filer.  The bill carries two zero fiscal            
notes.  No opposing testimony has occurred to date and SB 195                  
passed the Senate unanimously.                                                 
Number 0198                                                                    
CHAIRMAN ROKEBERG noted a witness from the Alaska Court System was             
available to respond to technical questions.                                   
Number 0224                                                                    
DOUGLAS WOOLIVER, Administrative Attorney, Alaska Court System,                
came forward to testify.  He offered to answer questions about why             
the court system requested that SB 195 be introduced or about the              
bill's content.                                                                
Number 0246                                                                    
CHAIRMAN ROKEBERG asked if the copy of the document, with the name             
Jimmy Drew Lockhart, Sr. in committee members' packets, is an                  
example of a non-consensual common law lien.                                   
Number 0276                                                                    
MR. WOOLIVER replied it is.  He explained in that case, Mr.                    
Lockhart's neighbor filed a complaint alleging that Mr. Lockhart               
was violating an Anchorage zoning ordinance.  Zoning enforcement               
officers inspected his property and found the allegations to be                
true.  As retribution, Mr. Lockhart recorded liens against all of              
the members of the Anchorage assembly, the mayor, and zoning                   
enforcement officers.  Mr. Wooliver noted that a copy of a                     
subsequent case, where another person attempted to record liens                
against another person who was not an elected official, is also in             
committee files.                                                               
Number 0341                                                                    
CHAIRMAN ROKEBERG commented the file also contains a court order               
signed by Judge Michalski on February 14, 1997, that contains a                
list of Anchorage residents, including the city attorney and                   
assembly members.  He asked if individual liens were filed against             
the cited  properties in the court order.                                      
MR. WOOLIVER said that was correct.                                            
CHAIRMAN ROKEBERG asked if all of the liens in the order were filed            
by the same person.                                                            
Number 0384                                                                    
MR. WOOLIVER answered the list contains all of the properties that             
Mr. Lockhart, Sr. filed liens against.                                         
Number 0400                                                                    
REPRESENTATIVE JOHN COWDERY asked if it is correct to assume that              
no existing statute makes this activity illegal.                               
Number 0411                                                                    
MR. WOOLIVER stated that is correct.  He said SB 195 amends an                 
existing statute which pertains to recording a false document.                 
That statute is not really aimed at this kind of activity; it                  
applies when a false statement is filed and proof of intent to                 
defraud is shown.  The lien filed by Mr. Lockhart does not actually            
contain a false statement, rather it alleges certain damages.  Mr.             
Wooliver explained the liens are invalid and can be removed by a               
court, but no penalty is on the books at this time to address this             
Number 0463                                                                    
CHAIRMAN ROKEBERG questioned the hand-written note on the bottom of            
one of the documents contained in the committee packet.                        
Number 0471                                                                    
MR. WOOLIVER replied had he noticed that note, he would not have               
used this lien as an example.  He stated he had no idea what the               
note was about but offered to provide the committee with a copy of             
a different lien to be included in the floor packets for House                 
Number 0505                                                                    
REPRESENTATIVE JERRY SANDERS asked whether a person going to court             
to have a lien removed would have to do so at his or her own                   
MR. WOOLIVER said that was correct.                                            
REPRESENTATIVE SANDERS asked how much that might cost.                         
Number 0519                                                                    
MR. WOOLIVER replied he does not know the exact cost.  He added                
that the Municipality of Anchorage's attorney ended up doing all of            
the work to remove the liens on municipal officials' property.  The            
attorney said the amount of work was extensive.  Mr. Wooliver                  
estimated the attorney's fees would cost at least several hundred              
dollars, and said that the process takes time as well.                         
Number 0550                                                                    
REPRESENTATIVE SANDERS maintained if the claimant had a good                   
attorney and chose to fight the case, the case could be costly and             
take a long time.                                                              
Number 0566                                                                    
MR. WOOLIVER answered that is particularly true in these types of              
cases because once some of the advocates of the common law courts              
and common law movement take such a case to court, they will fight             
jurisdiction, they will claim the wrong kind of flag is in the                 
courtroom, the service of process did not have the correct upper               
and lower case letters, et cetera, resulting in an enormous amount             
of paperwork.  He said several such cases are currently in the                 
court system and they are a nightmare for the courts.  The person              
trying to get the liens removed has to go through a wall of                    
paperwork just to have a clearly invalid lien removed from his or              
her title.                                                                     
Number 0622                                                                    
REPRESENTATIVE JOE RYAN asked whether the people who are filing the            
liens are claiming that is surety for damages.                                 
Number 0628                                                                    
MR. WOOLIVER said yes, the filing acts like a pre-judgment lien,               
which does not really exist.  One can get court approval of a pre-             
judgment attachment to property if a specific procedure is followed            
during litigation.  These pre-judgment liens were filed claiming               
damages in the amount of $250,000 against each lienholder.  The                
filings amount to several millions of dollars worth of liens, yet              
there is no judgment and they are not even part of a court case.               
Number 0648                                                                    
REPRESENTATIVE RYAN commented that the opposing side will say that             
legislators, acting in an official capacity, are denying them their            
ability to protest.                                                            
Number 0715                                                                    
MR. WOOLIVER pointed out even under the common law these liens                 
never existed.  A common law lien, as it was used, was the right to            
retain a piece of property if one does work on it.  Under common               
law, if a customer brought a car to a shop to have body work done,             
and did not pay for the work, the worker had the right to retain               
that property until paid.  That common law lien was based on                   
chattel rights.  Nothing was recorded, it was merely the right to              
possess something that one improved upon.  So, even though the                 
liens filed in the court now are referred to as common law liens,              
they were never valid and there is no basis for their existence.               
Number 0764                                                                    
REPRESENTATIVE SANDERS questioned whether the common law liens                 
being filed in the Municipality of Anchorage cloud the title to                
one's property.                                                                
Number 0776                                                                    
MR. WOOLIVER said that is correct.  Some title or mortgage                     
companies ignore them, but some do not because they view those                 
liens as potential lawsuits which they do not want to buy.  Mr.                
Wooliver stated he spoke with many people from that industry in                
preparing for SB 195, and was told that unless a statute clarifies             
that these liens are invalid, they will not ignore those liens.                
Number 0812                                                                    
CHAIRMAN ROKEBERG stated Mr. Wooliver mentioned that the historic              
antecedent to a common law lien was based on chattel rights for                
retention.  He questioned whether real property rights are                     
statutory in nature.                                                           
Number 0825                                                                    
MR. WOOLIVER replied liens have been filed on real property also;              
most property law goes back for centuries, but the common law lien             
was just the right to retain chattel that has been improved upon.              
These common law liens do not purport to have connection to any                
work done.                                                                     
Number 0853                                                                    
CHAIRMAN ROKEBERG commented these alleged common law liens were                
filed against real properties so they would be distinguished from              
Number 0868                                                                    
REPRESENTATIVE RYAN commented that the development of common law               
began in Great Britain during the reign of King Edward III until               
the United States became a country with a written constitution and             
a body of law based on case law.  He asked how this country                    
differentiates between statutory and common law.                               
Number 0894                                                                    
MR. WOOLIVER replied Alaska has a statute, as most states do, that             
provides that to the extent common law is not inconsistent with                
state or federal constitutions or laws adopted by the legislature,             
common law is adopted ["AS 01.10.010. Applicability of common law.             
So much of the common law not inconsistent with the Constitution of            
the State of Alaska or the Constitution of the United States or                
with any law passed by the legislature of the State of Alaska is               
the rule of decision in this state."].  If it is inconsistent, it              
is not.  Alaska still has a tie to hundreds of years of case law               
and Blackstone's commentary is a large part of that.  Over time,               
common law has been displaced by actions of the legislature.  He               
added Title 34, Chapter 35, is the lien section and pertains to                
over a dozen different types of liens, including what used to be               
the common law lien which is now called improvement of chattels.               
Number 0953                                                                    
CHAIRMAN ROKEBERG asked why the legislature previously had a common            
law lien in statute, AS 09.38.500 (9) ["(9) "lien" means a security            
interest, or a judicial, statutory, or common-law lien, or any                 
other interest in property securing payment of a debt or                       
performance of an obligation;"].                                               
MR. WOOLIVER responded that statute was adopted at statehood, or               
shortly thereafter.  He said while looking through the case law, he            
could not find any common law lien ever recognized by a court in               
Alaska.  He stated its inclusion may have been redundant, but it is            
maintained in statute for the purpose of preventing the inadvertent            
foreclosure of a legitimate right that might exist.                            
Number 1038                                                                    
CHAIRMAN ROKEBERG said that answers why it was kept on the books,              
but he indicated there are some caveats with the two subsections               
under (C) on the first page.  He asked if the only common law lien             
that could exist would be with the consent of the owner or through             
the court's consent.                                                           
MR. WOOLIVER said that is correct.                                             
Number 1053                                                                    
CHAIRMAN ROKEBERG asked whether a common law lien at this time is              
what is described on page 2, line 5, in Section (D) as:                        
     "(D) any interest in property other than one described in                 
     (A) - (C) of this paragraph securing payment of a debt or                 
     performance of an obligation;"                                            
Number 1087                                                                    
MR. WOOLIVER said if it was recognized in Alaska.  He repeated the             
inclusion of that section is an attempt to not accidentally shut               
any doors.  He indicated a 1980 attorney general's opinion says                
that common law liens almost certainly do not exist in Alaska at               
all because Alaska has such a comprehensive statutory scheme that              
governs liens.                                                                 
CHAIRMAN ROKEBERG said they would exist if SB 195 passes.                      
MR. WOOLIVER replied the bill adds one more.                                   
Number 1124                                                                    
CHAIRMAN ROKEBERG expressed concern about doing so.  He commented              
that language on page 3 refers to ex parte actions and states that             
the lien claimant shall "pay the costs and actual reasonable                   
attorney fees incurred by the party making the request" and asked              
how that squares with existing court rules.                                    
Number 1142                                                                    
MR. WOOLIVER responded those court rules are accepted as otherwise             
provided by statute.                                                           
CHAIRMAN ROKEBERG questioned whether "actual reasonable attorney               
fees" would equal 100 percent reimbursement.                                   
Number 1159                                                                    
MR. WOOLIVER replied that is correct, as long as the fees are                  
Number 1162                                                                    
CHAIRMAN ROKEBERG clarified that Rule 82 and the others that                   
pertain to the allocation does not come into play in this                      
MR. WOOLIVER said that is true.                                                
Number 1176                                                                    
REPRESENTATIVE RYAN asked if Rule 82 equates to 15 or 20 percent of            
the cost and requires some reasonableness.                                     
MR. WOOLIVER replied he does not know offhand and would have to                
check Rule 82.                                                                 
Number 1176                                                                    
REPRESENTATIVE RYAN asked if Rule 82 applies to everyone else, why             
a more punitive provision is included in SB 195 allowing                       
reimbursement of the full amount.                                              
Number 1216                                                                    
MR. WOOLIVER replied a lot of legislation comes with that same                 
language requiring "actual reasonable attorney fees."  Its purpose             
is to act as an extra disincentive for harassment action.  Rule 82             
was designed to not discourage legitimate lawsuits where the cost              
of attorneys' fees can preclude a person from pursuing a case.                 
Number 1259                                                                    
REPRESENTATIVE SANDERS questioned whether the phrase "reasonable               
attorney fees" is an oxymoron.                                                 
Number 1268                                                                    
REPRESENTATIVE RYAN suggested revisiting the statutes to see if                
requiring reimbursement of actual attorney fees would be                       
appropriate for the plethora of lawsuits filed by the environmental            
CHAIRMAN ROKEBERG offered to co-sponsor such legislation with                  
Representative Ryan.                                                           
Number 1296                                                                    
CHAIRMAN ROKEBERG informed committee members the bill contains a               
definition of "non-consensual common law liens" on page 3.  He                 
asked why officers or employees of the military or naval forces,               
and members of the National Guard, are included in the definition              
of public servants (page 4, lines 11 - 15).                                    
Number 1332                                                                    
MR. WOOLIVER said he was not entirely sure unless problems have                
occurred in other states with liens being recorded against those               
groups of people for doing their jobs as well.  He pointed out that            
although these liens have not become a huge problem in Alaska, they            
have been recorded against everybody under the sun in some of the              
other states, including trustees of a variety of boards and                    
commissions, pension funds, et cetera.                                         
Number 1368                                                                    
CHAIRMAN ROKEBERG referred to the definition of the word "record"              
on page 4, beginning on line 19 and asked if any other such                    
definition is contained in Alaska Statute.                                     
MR. WOOLIVER replied Title 40, Chapter 17 is the recorder statute              
but he was unsure whether it contains the same definition.                     
CHAIRMAN ROKEBERG asked for clarification of the intent of lines 22            
and 23 on page 4.                                                              
Number 1425                                                                    
MR. WOOLIVER explained that language was included to ensure that               
the provision does not only apply when a person goes to the proper             
place to record the lien.  Without that language, a person could               
record the lien in an improper place and argue that the offense                
would not apply.  He clarified that language was taken out of AS               
40.17.900 which is the public records and recorders' statute.  He              
added that statute contains the same definition of "record" as that            
included in SB 195.                                                            
Number 1472                                                                    
CHAIRMAN ROKEBERG noted SB 195 creates two different levels of                 
offense for recording a false document:  first and second degrees.             
He questioned whether recording a non-consensual lien is a first or            
second degree offense.                                                         
Number 1491                                                                    
MR. WOOLIVER replied it is a misdemeanor.  He explained the felony             
offense exists under current law but is difficult to apply to this             
activity.  SB 195 amends current law to more effectively deal with             
this type of activity.                                                         
Number 1506                                                                    
CHAIRMAN ROKEBERG asked if one would need a court order to record              
a non-consensual lien in the future, according to SB 195.                      
MR. WOOLIVER said that is correct.                                             
Number 1555                                                                    
REPRESENTATIVE COWDERY made a motion to move SB 195 out of                     
committee with individual recommendations and its accompanying zero            
fiscal notes.                                                                  
Number 1569                                                                    
CHAIRMAN ROKEBERG asked if there were any objections.  There being             
none, it was so ordered.                                                       

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