Grondal v. U.S.A

• Decision Date: 12 January 2010
• Docket Number: No. CV-09-0018-JLQ.,CV-09-0018-JLQ.
• Citation: 682 F.Supp.2d 1203
• Parties: Paul GRONDAL, a Washington resi-dent; and the Mill Bay Members Association, Inc., a Washington Nonprofit Corporation, Plaintiffs, v. UNITED STATES of America; US Department of Interior; Bureau of Indian Affairs, et. al., Defendants.
• Court: U.S. District Court — District of Washington

682 F.Supp.2d 1203

Paul GRONDAL, a Washington resi-dent; and the Mill Bay Members Association, Inc., a Washington Nonprofit Corporation, Plaintiffs,

v.UNITED STATES of America; US Department of Interior; Bureau of Indian Affairs, et. al., Defendants.

No. CV-09-0018-JLQ.

United States District Court, E.D. Washington.

Decided: Jan. 12, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Franklin L. Smith, Hedrick Smith PLLC, Seattle, WA, James M. Danielson, Kristin Marie Ferrera, Jeffers Danielson Sonn & Aylward PS, Wenatchee, WA, for Plaintiffs.

Pamela Jean DeRusha, US Attorney's Office, Spokane, WA, for United States of America, United States Department of Interior, Bureau of Indian Affairs.

Maureen Marcellay, Vancouver, WA, pro se.

James Abraham, Everett, WA, pro se.

Paul Wapato, Jr., Spokane, WA, pro se.

Lynn Benson, Omak, WA, pro se.

Darlene Hyland, Vancouver, WA, pro se.

Randy Marcellay, Omak, WA, pro se.

Sandra Covington, Omak, WA, pro se.

Linda Saint, Libby, MT, pro se.

Mike Marcellay, Brewster, WA, pro se.

Michael A. Arch, Law Offices of Michael A. Arch PLLC, Wenatchee, WA, R. Bruce Johnston, Law Office of R. Bruce Johnston, Bainbridge Island, WA, for Wapato Heritage LLC.

Timothy Ward Woolsey, Colville Tribes Office of Reservation Attorney, Nespelem, WA, for Confederated Tribes Colville Reservation.

MEMORANDUM OPINION and ORDER ON DISPOSITIVE

MOTIONS

JUSTIN L. QUACKENBUSH, Senior District Judge.

I. INTRODUCTION

Pending before the court are six motions: Federal Defendants' Motion to Dis- miss and Motion for Summary Judgment (Ct. Rec. 70); Plaintiffs' First Motion for Summary Judgment re: Contract Terms (Ct. Rec. 77); Plaintiffs' Second Motion for Summary Judgment re: Settlement Agreement (Ct. Rec. 79); Plaintiffs' Third Motion for Summary Judgment re: Estoppel (Ct. Rec. 81); Plaintiffs' Fourth Motion for Summary Judgment re: Arbitrary and Capricious Action and Due Process Violation by BIA (Ct. Rec. 83); Plaintiffs' Fifth Motion for Summary Judgment re: Actual Notice of Option to Renew (Ct. Rec. 85).

On October 29, 2009 the court heard oral argument on all motions. Appearing on behalf of Plaintiffs were James Danielson and Kristin Ferrera. Appearing on behalf of Defendants the United States of America, the United States Department of Interior, and the Bureau of Indian Affairs ("the Federal Defendants") was Pamela DeRusha. Appearing on behalf of the Confederated Tribes of the Colville Reservation was Timothy Woolsey.

None of the individually named Defendants who have ownership interests in the real property known as MA-8 appeared. The court notes that the United States has not entered an appearance on behalf of any of the named individual Indian landowners. The court does not know why such an appearance has not been filed since the United States actually granted the Master Lease (as opposed to simply approving it) on behalf of at least certain landowners pursuant to its authority under 25 C.F.R. § 162.601.¹ More importantly, 25 U.S.C. § 175 provides that "[i]n all States and Territories where there are reservations or allotted Indians the United States district attorney shall represent them in all suits at law and in equity," although the statute is not mandatory. Siniscal v. United States, 208 F.2d 406, 410 (9th Cir. 1953) (holding that 25 U.S.C.A. § 175 is not mandatory and that its purpose "is no more than to insure the Indians adequate representation in suits to ivhich they might be parties") Unlike this case, in Siniscal, the Indians named were being sued as individuals and "not with reference to any right in which the United States... is in the position of trustee or guardian." Id. At least one court has recognized where there is a possible conflict of interest between the Indians and the United States, it may be proper for the Indians to be represented by private counsel. State of New Mexico v. Aamodt, 537 F.2d 1102, 23 Fed.R.Serv.2d 810 (10th Cir.1976). The United States has not provided any reason for its failure to enter an appearance on behalf of the un-represented individual Indian landowners to make certain they have adequate representation in this action.

The six motions before the court are in essence cross-motions for summary judgment. The Federal Defendants' motion seeks summary judgment on their counterclaim for ejectment of the Plaintiffs' from their occupancy of the real property known as MA-8. Plaintiffs' motions seek dismissal of the Federal Defendants' counterclaim. Plaintiffs' motions also seek summary judgment on their five causes of action, all seeking declaratory judgment that the Plaintiffs have the legal right to use and occupy the Mill Bay Resort (located on MA-8) through the year 2034. Federal Defendants' seek dismissal of Plaintiffs' five causes of action seeking declaratory judgment based upon a lack of jurisdiction and for failure to state a claim. The Federal Defendants take the position that the Plaintiffs' right to occupy the Mill Bay Resort expired on February 2, 2009 pursuant to the terms of the MA-8 Master Lease.

II. STATEMENT OF FACTS

Plaintiffs are occupants of the Mill Bay Resort which exists on real property known as Moses Allotment No. 8, also known as Indian Allotment 151-MA-8 ("MA-8"). MA-8 consists of approximately 174.26 acres on the shores of Lake Chelan in Chelan County, Washington. While the record does not contain a chronology of the conveyance history of the property, evidence in the record reflects that the property was originally designated as part of the Columbia (or Moses) Reservation created by Executive Order in 1879, but then subsequently the reservation passed out of existence and the property was allotted under the General Allotment Act of 1877. Ct. Rec. 90, Ex. 13. The MA-8 property was allotted to Wapa-to John in 1907 pursuant to an agreement between the Moses Band of Indians and the Secretary of the Interior. The trust patent issued by the United States for the MA-8 property provided that it was to be held in trust for Wapato John or his heirs for ten years, and then to be conveyed in fee "free of all charge or incumbrances." Ct. Rec. 90 at 178.

Upon the death of Wapato John, his interest in MA-8 passed in undivided interests to his heirs. Thereafter, interests in MA-8 continued to pass pursuant to inheritance, probate proceedings and by purchase. By the 1980s, the beneficial ownership interest of Wapato John's heirs had fractioned into many interests. Most (but not all) were still held in trust status (e.g. had Indian landowners). A small percentage of MA-8 is non-Indian land owned in fee.² Ct. Rec. 90, Ex. 103. It is undisputed that the portion of MA-8 at issue is trust property, held in trust by the United States and administered by the U.S. Department of Interior, Bureau of Indian Affairs ("BIA"). The local department of the BIA is known as the Colville Agency.

a. The Master Lease. In 1979, an Indian landowner named William Wapato Evans, Jr., ("Evans") held an approximate 5.4% beneficial ownership interest in MA-8. Evans desired to lease the entire parcel (which was largely undeveloped at that time) from his co-owners for a development.

In 1982, Evans began negotiating a 25-year lease of MA-8 from the then existing individual landowners, and eventually obtained approval for his proposed lease from additional individual heirs of MA-8 representing a total of approximately 64% of the ownership interests. Ct. Rec. 90, Ex. 15. It is undisputed the BIA had "guardianship signatory authority" for the remaining minority number of allottees pursuant to 25 C.F.R. § 162.601. The BIA consented to the lease on behalf of the rest of the trust interests pursuant to this reg- ulatory authority. On February 2, 1984, the BIA approved Lease No. 82-21 (the "Master Lease") between Evans and his Indian co-owners.

b. Parties to the Master Lease. The master lease defines the "Lessee" as Evans, and the "Lessor" as individuals whose names and addresses were to be listed in an attached "Exhibit A." There is no "Exhibit A" of record and no evidence in the record whether "Exhibit A" ever existed. The Master Lease contains just two signatures. It was signed by Evans as "Lessee" and under "Lessor" was the signature of George Davis, Secretary of the BIA. No landowner signed the lease.

The Master Lease provided income in the form of rent to the beneficial owners of MA-8.

c. Stated Purpose. The Master Lease provides for the use of the property for the "purpose of a recreational development and related activities." Ct. Rec. 90 at 31 [Ex. 1 at ¶ 6]. At the time the Master Lease was signed it was contemplated that portions of the leased property would be "allocated to recreational vehicles on a 'right to use' basis." Id. at 29 [Ex. 1, ¶ 4(b)].

d. Renewal. The Master Lease contains the following provisions regarding renewal:

3. TERM-OPTION TO RENEW

The term of this lease shall be twenty-five (25) years, beginning on the date that the lease is approved by the Secretary.

This lease may be renewed at the option of the Lessee for a further term of not to exceed twenty=five [sic] (25) years, commencing at the expiration of the original term, upon the same conditions and terms as are in effect at the expiration of the original term, provided that notice of the exercise of such option shall be given by the Lessee to the Lessor and the Secretary in writing at lease [sic] twenve [sic] (12) months prior to said expiration of original term.

Ct. Rec. 90, Ex. 1, ¶ 3. The notice provision of the Master Lease provided that all "notices, payments, and demands shall be sent to either party at the address herein recited or to such place as the parties may hereafter designate in writing. Notices and demands shall be served be [sic] certified mail, return receipt requested... Copies of all notices and demands shall be sent to the Secretary in care of the office of the [BIA]... All notices to Lessor shall be sent to the landowners. The Secretary shall furnish Lessee with the current...