Hakala v. Atxam Corp.

Citations: 753 P.2d 1144; 1988 Alas. LEXIS 51; 1988 WL 36674Docket: S-1866

Court: Alaska Supreme Court; April 22, 1988; Alaska; State Supreme Court

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The case involves an appeal by Steven Hakala and George Kitchen against Atxam Corporation regarding the interpretation of "a primary place of business" under Section 14(c)(1) of the Alaska Native Claims Settlement Act (ANCSA). This section mandates that village corporations reconvey land used as a primary business location to its occupants if the land was utilized for such purposes as of December 18, 1971. Kitchen and Hakala assert that their cabin and surrounding land in Canoe Bay, used for guiding brown bear hunts, qualify as a primary place of business, thus requiring reconveyance from Atxam. 

George Kitchen, a professional guide since 1967, established a base camp at this site, initially using prefabricated structures and later constructing a permanent cabin in 1974. The cabin is equipped for living and operates as a hub for his guiding activities, which include an exclusive guiding permit for a designated area. Kitchen's operations typically involve transporting clients and supplies to the cabin, from where he leads hunts in the surrounding wilderness. Due to seasonal restrictions on hunting, the cabin's use is concentrated in specific two-week periods each spring and fall, with some additional time allotted for preparation and post-hunt activities. The trial court had previously granted summary judgment in favor of Atxam, but the appellate court found that the cabin site should be recognized as "a primary place of business."

Kitchen charged hunters $4,000 for guiding services in Canoe Bay in 1971, increasing to $7,000 by 1987, with a profit of $1,800 per hunter after expenses. Hakala, who began assisting Kitchen in 1975, has an agreement to take over Kitchen's operations upon his retirement at age 72. Atxam Corporation, a Village Corporation, received title to 12,500 acres in Canoe Bay from the U.S. government under Interim Conveyance No. 159, which is subject to various exceptions and easements. Atxam sued Kitchen and Hakala for trespassing by erecting a cabin and conducting hunting expeditions on its property, seeking a permanent injunction, possession, and damages. Kitchen and Hakala countered that they were entitled to reconveyance of the land under 14(c)(1) of ANCSA, which allows for the reconveyance of land occupied as a "primary place of business." The Superior Court granted Atxam partial summary judgment, ordering Kitchen and Hakala to vacate the cabin, extinguishing their claims to the land, and prohibiting their entry and hunting on the property. Atxam later dismissed its claim for monetary damages and obtained final judgment. Kitchen and Hakala appealed, with the primary issue being the interpretation of "a primary place of business" under 14(c)(1) of ANCSA, a term that has not been previously defined in case law. Both parties presented their interpretations, and the court was tasked with construing the ambiguous phrase according to statutory purpose and the plain meaning of the language.

Congress established the Alaska Native Claims Settlement Act (ANCSA) to address urgent claims by Natives and Native groups in Alaska regarding aboriginal land, emphasizing a fair and swift settlement that respects the economic and social needs of these communities. The Act affirms the U.S. policy to grant title to lands occupied by Native tribes and acknowledges the impoverished conditions faced by Natives. Courts have interpreted ambiguities in ANCSA to favor Natives, and it is believed that Congress did not intend for lands to be conveyed exclusively to Native corporations, as evidenced by the inclusion of a reconveyance clause designed to protect existing land users.

The interpretation of "a primary place of business" under ANCSA is pivotal, with Kitchen and Hakala arguing that their cabin site, serving as a base for guiding operations, qualifies as their primary business location. They highlight Congress's use of the indefinite article "a," suggesting multiple business locations can qualify. This argument aligns with the understanding that Alaskans often engage in various businesses. The ruling affirms that each business can have only one primary place of business, defined as the main center of activity.

Atxam proposed a more quantitative interpretation of "primary place of business," requiring improvements to the site, a permanent structure, and usage for at least six months a year. However, this stricter definition was deemed excessive.

Rigid and arbitrary requirements would undermine Congress' intent to protect the rights of those utilizing specific lands. The interpretation of "a primary place of business" must consider the context of remote lands, where businesses typically operate seasonally and often do not require permanent structures. Atxam's demands for a permanent structure and six months’ occupancy do not reflect the realities of such businesses. The undisputed facts show that Kitchen used the cabin and surrounding area as the base for his brown bear guiding operations since 1969, holding the necessary licenses. Thus, the cabin constituted Kitchen's primary place of business as outlined in the reconveyance clause of ANCSA, mandating Atxam to reconvey the cabin site to him. The court will determine the appropriate size of the curtilage around the cabin. Kitchen and Hakala can access public easements but need permission from Atxam for any hunting outside designated areas. The trial court's injunction against trespassing is affirmed, and the superior court's judgment is reversed, remanding the case for further proceedings. Justice Rabinowitz dissents, cautioning against an expansive interpretation of "a primary place of business" as it may overreach Congress' intent. He argues that the cabin was not the primary place of business for Hakala’s guiding operations.

In 1971, the year critical for reconveyance, Hakala's guiding business involved twenty parties, but only two utilized the Canoe Bay cabin, which served as a base for just one-tenth of his activities. This raises questions about the cabin being considered the "center" or "nucleus" of his business under Section 14 (c)(1). The cabin was constructed in 1974, two years post the relevant date for this provision, yet it relates to the curtilage issue. Alaska residents could hunt in the area without a guide, and regulations allow for an 18-month gap after an October hunt before returning to the same game management unit. The term "primary," as defined in Black's Law Dictionary, suggests there can only be one primary entity. The court did not take a stance on whether a primary business location must be improved land; however, the contested site was indeed improved. Appeals from summary judgment grants are reviewed de novo. The court rejected Kitchen and Hakala's claim that curtilage included access rights to the entire area used by Kitchen. Instead, it adhered to the traditional definition of curtilage as land commonly associated with a dwelling, necessary for its convenient occupation. The extent of public use of easements created under ANCSA remains unclear; a 1977 federal case suggested they were for access rather than recreational use of Native lands, while a 1979 Secretary of the Interior ruling allowed for coastline easements for recreational purposes.