In re Darrell J. Totemoff

ORDER ON MOTION TO DISMISS

On September 12, 2014 the deceased, Darrell J. Totemoff, executed a Chugach Alaska Corporation (“Chugach Alaska”) stock will. In the will, Mr. Totem off identified himself, identified his beneficiaries, and identified the number of shares each beneficiary was to receive. In addition, Mr. Totemoff identified the location at which he executed the will. However, Mr. Totemoff did not have the will notarized. Because the will was not notarized, Chugach Alaska Corporation has refused to honor it.

Petitioners now seek to admit the stock will to probate as a holographic will under AS 13.12.502(b). But under a different statute, AS 13.16.705, the Chugach Alaska Corporation, not a probate court, must determine who receives Mr. Totemoff’s Chugach Alaska stock in the first instance. The stock is not part of the estate and therefore “not subject to probate.” AS 13.16.705(a). If Petitioners disagree with Chugach Alaska’s decision, they may file an independent action with the superior court. Id. Accordingly, Chugach Alaska’s Motion to Dismiss is GRANTED.

Alaska courts interpret the law “according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters.” Native Village of Elim v. State, 990 P.2d 1, 5 (Alaska 1999). “In general, if two statutes conflict, then the later in time controls over the earlier, and the specific controls over the general.”[1] Allen v. Alaska Oil & Gas Conservation Comm’n, 147 P.3d 664, 668 (Alaska 2006). However, the court must interpret potentially conflicting statutes “with a view toward reconciling conflict and producing a harmonious whole.” Id.

Here, AS 13.06.065 establishes the probate jurisdiction of the superior court, while AS 13.16.705 specifically addresses testamentary transfers of Native corporation stock. Under AS 13.06.065, the court has jurisdiction over “estates of decedents, including construction of wills and determination of heirs and successors.” Petitioners claim this provision authorizes the court to admit Mr. Totemoff’s stock will to probate. But AS 13.16.705 provides that the “common stock or other alienable stock” of a Native Corporation is not “subject to probate” and may not be considered “in determining the value of an estate or allowance.” Thus, the statutory language suggests that Mr. Totemoff’s Chugach Alaska stock is not part of the estate. If the stock is not part of the estate, it does not fall within the Court’s probate jurisdiction, which extends only to “estates of decedents.”[2]

The legislative history of AS 13.16.705 supports this interpretation. The Legislature enacted AS 13.16.705 to implement the Alaska Native Claims Settlement Act (ANCSA). ANCSA, which settled various claims by Native Alaskans on aboriginal territory, aimed to ensure the economic well-being of Native communities and preserve the Native Alaskan way of life. See 43 U.S.C. §§ 1601-07. To that end, ANCSA restricted transfers of Native Corporation stock. Id. § 1606. However, ANCSA left the State free to determine how stock would pass upon the death of a shareholder. Id. § 1606(h)(2)(A) (providing that stock in a Native Corporation shall pass “in accordance with the lawful will of [the shareholder] or pursuant to the applicable laws of intestate succession”).

In direct response to the latter aspect of ANSCA, AS 13.16.705(a) unambiguously declares that Native Corporation stock is “not subject to probate” and may not be included in the estate. Instead, the stock should pass by either a testamentary form on the back of the stock certificate, or a separate form that “substantially satisfies” the requirements of the statute and is “distributed to the same extent as the [stock] certificate.” Id. If the stock does not pass by either the stock certificate or an equivalent form, the Native corporation that issued the stock-in this case, Chugach Alaska-must determine who is entitled to the stock based on an affidavit, furnished to the Native corporation or its agent, “showing the right of the person entitled to the stock to receive it.” Id. If the Native corporation accepts the affidavit and transfers the stock, it is “discharged and released to the same extent as if [it] dealt with a personal representative of the decedent.” AS 13.16.685. If the Native corporation refuses to transfer the stock as requested in the affidavit, the party requesting the transfer may file “an independent action in the superior court.” AS 13.16.705(a).

AS 13.16.705 establishes the exclusive procedure for distributing Native Corporation stock upon the death of a shareholder. Contrary to Petitioners’ assertions, AS 13.06.065 – which broadly declares that the court has jurisdiction over “estates of decedents” – does nothing to alter this statutory scheme. As discussed above, Native corporation stock may not be considered “in determining the value of an estate or allowance.” The Native Corporation must decide, in the first instance, who inherits the stock. Because Chugach Alaska has refused to honor Mr. Totemoff’s stock will, it must now dispose of the stock on the basis of an affidavit from the party entitled to receive it. AS 13.16.705(a). In other words, Petitioners must submit an affidavit to Chugach Alaska showing that they are entitled to inherit Mr. Totemoff’s stock. If Petitioners disagree with Chugach Alaska’s subsequent decision, they may tile an action with the Superior Court. Id.

Petitioners argue that the court, not Chugach Alaska, must determine the “validity or lawfulness” of Mr. Totemoff’s stock will. Memorandum in Support of Response to Motion to Dismiss at 6. But there is no need, at this juncture, for a probate court to determine the validity of the will. The Legislature enacted AS 13.16.705, to ensure that the Native community, and not the State, retained primary authority over inheritance of Native corporation stock. See, e.g., Alaska House Judiciary Committee Minutes of the Meeting, Thursday, April 6, 1972, Statements of Rep. Jackson at 162. Thus, the legislature chose to prioritize the legitimacy of inheritance decisions among Native communities over the legal sufficiency of testamentary documents. The Legislature anticipated that many documents purporting to transfer Native Corporation stock after death would not satisfy the requirements for a legally valid will. Id. Nonetheless, AS 13.16.705 demonstrates a clear legislative intent to give effect to such documents. Petitioners’ interpretation of the statutes would render AS 13.16.705 meaningless because disposition of Native Corporation stock would not differ in any significant way from an ordinary probate proceeding.

Because Mr. Totemoff’s Chugach Alaska stock is separate from the estate, Chugach Alaska, and not the court sitting in probate, must decide whether Petitioners are entitled to Mr. Totemoff’s stock. If Petitioners disagree with Chugach Alaska’s decision, they may file and independent action with this court. Chugach Alaska’s Motion to Dismiss is GRANTED.

ORDERED this 26th day of April, 2016, at Anchorage, Alaska.

Andrew Guidi
Superior Court Judge