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
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved Out of Committee
Moved Out of Committee
Bills 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                                                               
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                                                               
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.                                                                  

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