Shaffer v. Bellows
260 P.3d 1064
Alaska2011Background
- Bradley Shaffer and Kenneth Bellows purchased Ring Island in 1981, each contributing $25,000 to the down payment.
- In 1982 Shaffer quitclaimed his interest to Bellows, claiming consideration included repayment of past costs and an option to purchase the island.
- The Option Agreement provides Shaffer a first option to buy the property only if Bellows elects to sell, with a price pegged to inflation-adjusted base of $123,200.
- In 2006 Bellows quitclaimed Ring Island to his sister, Marlys Hanson, as a gift; Bellows later questioned whether the option would still be triggered.
- Shaffer alleged the gift rendered Bellows insolvent, that the conveyance was fraudulent, and that Hanson possessed and used the island for years.
- The superior court granted summary judgment on most counts, but Shaffer appealed, and the Alaska Supreme Court vacated and remanded on several claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper test for fraudulent conveyance under AS 34.40.010 | Shaffer contends Nerox badges of fraud, not Summers-Asher dicta, govern the claim. | Bellows/Hanson argued the Summers-Asher framework applies to fraudulent conveyance. | Nerox badges apply; material facts disputed remand. |
| Whether genuine issues of material fact exist on fraudulent conveyance | Evidence shows several badges of fraud (inadequate consideration, insolvency, retention of possession). | Record supports lack of fraud or disputed facts not sufficient for summary judgment. | Yes; genuine issues of material fact exist; remand warranted. |
| Interpretation and enforceability of the Option Agreement | Shaffer contends option rights could be triggered by defendant’s actions beyond a sale. | Agreement unambiguously activates only if Bellows elects to sell; no independent right to trigger. | Agreement unambiguously favors trigger only upon sale; remand for related contract issues. |
Key Cases Cited
- Nerox Power Systems, Inc. v. M-B Contracting Co., 54 P.3d 791 (Alaska 2002) (badges-of-fraud approach to fraudulent conveyance)
- Asher v. Alkan Shelter, LLC, 212 P.3d 772 (Alaska 2009) (footnote dicta misapplied; Summers framework misused)
- Summers v. Hagen, 852 P.2d 1165 (Alaska 1993) (conspiracy-to-fraudulently convey elements)
- Williams v. Crawford, 982 P.2d 250 (Alaska 1999) (extrinsic evidence of contract intent limited to ambiguous terms)
- Gabaig v. Gabaig, 717 P.2d 835 (Alaska 1986) (badges of fraud considered in evaluating fraud theories)