376 P.3d 1245
Alaska2016Background
- James H. Bingman, Sr. defaulted on property taxes for multiple Dillingham parcels; the superior court foreclosed and conveyed the properties to the City subject to a one-year statutory redemption period.
- Four days after the foreclosure decree, Bingman delivered a Security Agreement and a Promissory Note to the City promising to pay the present value of the delinquency ($88,250.49) in 20 years and stating that delivery and acceptance would satisfy the tax judgment.
- Bingman’s form required the City to reject the offer within 14 days by specific steps (return documents, provide corrected account, legal citations, affidavit); silence or inadequate rejection would be treated as acceptance.
- The City mailed a rejection letter on June 16, 2014 (to Bingman’s Dillingham address rather than his designated California service address) and did not return the note. Bingman did not make further redemption attempts.
- A year later the City sought tax deeds; Bingman intervened claiming redemption by his tendered note. The superior court found no contract and denied relief; Bingman appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract was formed by Bingman’s offer and the City’s conduct | Bingman: his offer would be accepted by silence or by City retaining the promissory note; City’s failure to comply with his rejection-form requirements meant acceptance | City: it explicitly rejected the offer by letter and never manifested assent; retention of the note alone is not acceptance | No contract — City expressly rejected the offer and did not accept Bingman’s terms |
| Whether retention of the promissory note operated as acceptance under UCC law | Bingman: City’s retention of the note constituted taking it in satisfaction of the obligation | City: mere receipt or retention without negotiation or other acceptance acts does not discharge the debt; objective intent controls | Retention without negotiation + an express rejection letter shows no intent to accept; retention did not effect payment |
| Whether the City’s rejection was ineffective because it was not mailed to Bingman’s designated service address | Bingman: he did not receive the June 16 letter and was entitled to treat silence as acceptance | City: the letter is objective evidence of rejection and its later actions (no redemption recorded; published notices; motion for tax deed) confirm rejection | City’s letter and consistent subsequent conduct defeated Bingman’s silence/acceptance theory despite address dispute |
| Ancillary: Due process / statute of frauds / repurchase statute arguments | Bingman: asserted due process and repurchase claims | City: superior court correctly denied relief; contract never formed so statutory and frauds issues need not be reached | Court rejected constitutional and repurchase arguments; did not reach statute of frauds because no contract was formed |
Key Cases Cited
- Chilkoot Lumber Co. v. Rainbow Glacier Seafoods, Inc., 252 P.3d 1011 (Alaska 2011) (standard: contract formation and interpretation reviewed de novo)
- Municipality of Anchorage v. Stenseth, 361 P.3d 898 (Alaska 2015) (unequivocal acceptance required to form express contract)
- Childs v. Kalgin Island Lodge, 779 P.2d 310 (Alaska 1989) (requirements for contract acceptance)
- Magill v. Nelbro Packing Co., 43 P.3d 140 (Alaska 2002) (plaintiff bears burden to prove unequivocal acceptance and intent to be bound)
- Sherman B. v. State, Dep’t of Health & Social Servs., Office of Children’s Servs., 290 P.3d 421 (Alaska 2012) (clear-error standard for factual findings)