Davin J Anderson V Alaska Housing Finance Corporation

Key Facts

Issues

• The court examined whether AHFC's non-judicial foreclosure process violated Anderson's due process rights by failing to provide a pre-deprivation opportunity to be heard. The court held that under the Alaska Constitution, before the state may deprive a person of a protected property interest there must be a hearing, with exceptions only for emergencies or public health/safety concerns. The court found that AHFC's procedures—including notice requirements, ability to cure default, trustee involvement, and debt verification disclosures—did not constitute a constitutionally sufficient opportunity to be heard before a neutral decision-maker. The court reversed the superior court's summary judgment on the due process question and remanded for further proceedings.
• The court needed to determine if the Alaska Housing Finance Corporation (AHFC), a public corporation organized within the Alaska Department of Revenue, qualifies as a 'state actor' subject to constitutional due process obligations. Using the Lebron test, the court analyzed whether AHFC was specifically created by the legislature for governmental objectives and whether the state controls its operation through appointees. The court concluded AHFC is an agency of the State because it was created for governmental objectives (addressing housing shortages for low- and middle-income Alaskans) and all seven board members are state agency commissioners or appointed by the governor.

Holdings

Remedies

• The court remanded the case for further proceedings consistent with this opinion
• The court reversed the superior court's summary judgment decision on the due process question

Legal Principles

• Alaska's non-judicial foreclosure statute notice requirements, the ability to cure default by payment, customer service calls to Wells Fargo, the trustee's role, and FDCPA debt verification disclosures all fail to constitute a constitutionally sufficient opportunity to be heard. None provide a meaningful opportunity to present arguments to a neutral decision-maker before property deprivation.
• A waiver of constitutional rights must be knowing and voluntary, and courts indulge every reasonable presumption against waiver. The note and deed of trust were adhesion contracts without reciprocal negotiation between forces of equal strength, and no provision expressly waived constitutional rights, so Anderson did not waive his right to a pre-deprivation hearing.
• Under the Alaska Constitution, a pre-deprivation hearing is required before the state deprives a person of a protected property interest. The court held that some form of pre-foreclosure hearing is constitutionally required when a public entity like AHFC forecloses on a deed of trust, absent emergency circumstances. The existing notice procedures, debt verification under FDCPA, and ability to file a lawsuit do not constitute a meaningful opportunity to be heard.
• Anderson has a constitutionally protected property interest in his home as ownership of real property is a quintessential form of property protected by due process. The foreclosure constituted a deprivation of property requiring constitutional protections, even though it was the contractual remedy under the deed of trust.
• AHFC is a state actor under the Lebron v. National Railroad Passenger Corp. test because it was specifically created by the legislature for governmental objectives (addressing housing shortage for low- and middle-income Alaskans) and is wholly controlled by the State through its seven board members who are government officials or appointed by the governor. As a government entity, AHFC must satisfy constitutional due process restrictions.

Precedent Name

• Garcia v. Fed. Nat'l Mortg. Ass'n
• Fuentes v. Shevin, 407 U.S. 67 (1972)
• Laverty v. Alaska Railroad Corp.
• City of North Pole v. Zabek
• Ostrow v. Higgins
• Brandner v. Providence Health & Servs.-Washington
• Lebron v. National Railroad Passenger Corp.
• Memphis Light, Gas & Water Div. v. Craft

Cited Statute

• AS 16.10.335(a)(4)
• 15 U.S.C. § 1692g(a) (2012)
• Alaska Statute 34.20.070
• AS 18.56.010
• AS 34.20.080

Judge Name

• Carney, Justice
• Maassen, Justice
• Winfree, Justice
• Bolger, Chief Justice
• Stowers, Justice

Passage Text

• [A] corporation is an agency of the Government, for purposes of the constitutional obligations of Government rather than the 'privileges of the government,' when the State has specifically created that corporation for the furtherance of governmental objectives, and not merely holds some shares but controls the operation of the corporation through its appointees.
• Under the Alaska Constitution, 'before the state may deprive a person of a protected property interest there must be a hearing.' We thus conclude that some opportunity to be heard was required in this case before AHFC foreclosed on Anderson's deed of trust.
• We conclude that AHFC is a 'state actor,' that the foreclosure effected a deprivation of the borrower's property, and that the borrower was not afforded a constitutionally required pre-deprivation opportunity to be heard. We therefore reverse the superior court's summary judgment decision on the due process question and remand for further proceedings.