Legislature(2005 - 2006)CAPITOL 17
04/11/2005 03:15 PM House LABOR & COMMERCE
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SB 129-WRONGFUL FILING OF LIS PENDENS CHAIR ANDERSON announced that the first order of business would be CS FOR SENATE BILL NO. 129(JUD), "An Act relating to the wrongful recording of a notice of pendency of an action relating to title to or right to possession of real property." DEBORAH GRUNDMANN, Staff to Senator Charlie Huggins, Alaska State Legislature, presented the CSSB 129(JUD) on behalf of Senator Huggins, sponsor. She explained that the bill is an act related to the wrongful recording of a notice of pendancy of an action relating to title to or right to possession of real property. She continued: Senate Bill 129 discourages abusive filings of illegal lis pendens notices and, in fact, makes it a class A misdemeanor to file a wrongful notice of a lis pendens. While the filing does not create a formal lien, such a notice can have an impact similar to that of a lien on the ability of the targeted person to do business with the affected real estate. MS. GRUNDMANN continued: Senate Bill 129 responds to instances to nuisance filings used as a form of retribution against public officials. Current laws clear that lis pendens are only supposed to be filed against property for which the title or right to possession is subject to litigation. But the recorder's office currently has no way to prevent people from filing improper lis pendens. Ordinarily the improper filing is against property that is not subject to dispute, however, the filing is made simply because the filer has a grievance against the owner or someone connected with the owner. There's an example: in 2003, a former state employee filed a lis pendens targeting the home, development property, mining claims of members of Alaska Board of Game, an assistant attorney general, and a real estate developer. None of the properties were actually the subject of a title or possession dispute, but the case took months and thousands of dollars in attorney time to resolve. REPRESENTATIVE LYNN asked how many lis pendens abuses there have been. 3:31:32 PM RUTH HAMILTON HEESE, Assistant Attorney General, Environmental Section, Civil Division, Department of Law, stated that there have been two instances that have been high profile. She commented, "Whether they have occurred elsewhere, we're not really knowledgeable at this moment because oftentimes you don't know that a lis pendens has been filed on your real property until you go to do something with the real property." CHAIR ANDERSON noted that he has filed many lis pendens when he worked for a law firm, and many of them were either in commercial transaction or divorce proceedings. He asked that Ms. Hamilton Heese to explain lis pendens for the committee. MS. HAMILTON HEESE explained that lis pendens is a pending lawsuit, or in other words, "a notice filed on public records with the purpose of warning all persons who are interested in the property that the title to certain property is in litigation and that they are in danger of being bound by an adverse judgment." She reiterated that this bill makes it a class A misdemeanor to file a wrongful notice of a lis pendens; therefore an individual would be subject up to a $10,000 fine, or up to a year in prison. An organization that frivolously files a lis pendens would be subject to a $200,000 fine. 3:34:00 PM REPRESENTATIVE GUTTENBERG asked if [a person could file a lis pendens against any other person, regardless of whether the second person works for the state or other government]. MS. HAMILTON HEESE replied that the bill does have a broader application and could be for people outside of the realm of the public decision process. She continued: "If something like this happens, that the land isn't at issue, that person could take advantage of this law. But this ... amendment to the existing law is being spurred by the very situation that we are here discussing with you." 3:34:55 PM REPRESENTATIVE GUTTENBERG asked for further clarification if the motivation behind the bill was the previously mentioned action against the Board of Game. MS. HAMILTON HEESE replied affirmatively, and added that the "experience behind the 1998 law being passed" was also a motivating factor. REPRESENTATIVE GUTTENBERG asked what kind of penalty would there be for "people that have already done this" before the bill passes. MS. HAMILTON HEESE responded that she did not know. 3:36:07 PM REPRESENTATIVE ROKEBERG asked why the current legislation doesn't apply to the case used in the example. MS. HAMILTON HEESE explained that the 1998 law dealt with names against property, and she said, "This is a different animal, a different type of document." REPRESENTATIVE ROKEBERG commented, "So it's the way the statute was drafted." MS. HAMILTON HEESE agreed. 3:37:06 PM MIKE FLEAGLE, Chairman, Board of Game, Alaska Department of Fish & Game (ADF&G), stated that he was a member of the Board of Game when the previously mentioned lawsuit was filed against the board. He clarified that the lawsuit was not only directed against ADF&G and the board, but also against specific board members. He said that some of his colleagues on the board had some pretty major problems trying to straighten it out. He pointed out that Board of Game members serve in a voluntary capacity, although they do receive a daily honorarium. He expressed concern that members could be personally filed against for actions that they take as officials of the state; this makes it difficult to find members willing to serve. He offered his belief that this bill would alleviate some of those concerns. 3:41:04 PM REPRESENTATIVE GUTTENBERG asked for the definition of the term "reckless disregard." MS. HAMILTON HEESE replied that it is a standard term and refers to "knowingly doing something that probably is not quite right." CHAIR ANDERSON closed public testimony. 3:42:09 PM REPRESENTATIVE LYNN moved to report CSSB 129(JUD) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSSB 129(JUD) was reported from the House Labor and Commerce Standing Committee.