Grondal v. United States

Decision Date19 January 2021
Docket NumberNO: 2:09-CV-18-RMP,: 2:09-CV-18-RMP
Citation513 F.Supp.3d 1262
Parties Paul GRONDAL, a Washington resident; Mill Bay Members Association, Inc., a Washington non-profit corporation, Plaintiffs, v. UNITED STATES of America; United States Department of Interior ; Bureau of Indian Affairs; Francis Abraham; Catherine Garrison ; Maureen Marcellay, Mike Palmer, also known as Michael H. Palmer; James Abraham; Naomi Dick; Annie Wapato; Enid Marchand; Gary Reyes; Paulwapato, Jr.; Lynn Benson ; Darlene Hyland; Randy Marcellay; Francis Reyes; Lydia W. Armeecher; Mary Jo Garrison; Marlene Marcellay; Lucina O'Dell; Mose Sam; Sherman T. Wapato; Sandra Covington; Gabriel Marcellay; Linda Mills; Linda Saint ; Jeff M. Condon; Dena Jackson; Mike Marcellay; Vivian Pierre; Sonia Vanwoerkon; Wapato Heritage, LLC; Leonard Wapato, Jr.; Derrick D. Zunie, II; Deborah L. Backwell; Judy Zunie; Jaqueline White Plume; Denise N. Zunie; Confederated Tribes Colville Reservation; and Allottees of MA-8, also known as Moses Allotment 8, Defendants.
CourtU.S. District Court — District of Washington

Franklin L. Smith, Law Offices of Franklin L. Smith, Seattle, WA, Joseph Q. Ridgeway, Robert R. Siderius, Jr., Sally W. Harmeling, Jacob M. Knutson, Jeffers Danielson Sonn & Aylward PS, Wenatchee, WA, for Plaintiff Paul Grondal.

Joseph Q. Ridgeway, Robert R. Siderius, Jr., Sally W. Harmeling, Jacob M. Knutson, Jeffers Danielson Sonn & Aylward PS, Wenatchee, WA, for Plaintiff Mill Bay Members Association Inc.

Joseph P. Derrig, Pamela Jean DeRusha, Timothy Michael Durkin, U.S. Attorney's Office, Spokane, WA, for Defendants United States of America, United States Department of Interior.

Pamela Jean DeRusha, Timothy Michael Durkin, U.S. Attorney's Office, Spokane, WA, for Defendant Bureau of Indian Affairs.

Manish Borde, Borde Law PLLC, Seattle, WA, for Defendant Gary Reyes.

Tyler D. Hotchkiss, Foreman Hotchkiss Baucher and Zimmerman, Dale Melvin Foreman, Daniel J. Appel, Foreman, Appel, Hotchkiss & Zimmerman, PLLC, Wenatchee, WA, Emanuel F. Jacobowitz, Nathan J. Arnold, Cloutier Arnold Jacobowitz PLLC, Seattle, WA, R. Bruce Johnston, Law Office of R. Bruce Johnston, Bainbridge Island, WA, for Defendant Wapato Heritage LLC.

Brian Cammiade Gruber, Anna E. Brady, Brian W. Chestnut, Ziontz Chestnut, Seattle, WA, Dana Cleveland, Office of the Reservation Attorney-Colville Tribe, Nespelem, WA, for Defendant Confederated Tribes Colville Reservation.

Francis Abraham, pro se.

Catherine Garrison, Tukwila, WA, pro se.

Maureen Marcellay, Vancouver, WA, pro se.

Mike Palmer, Nespelem, 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.

Francis Reyes, Elmer City, WA, pro se.

Mary Jo Garrison, Seattle, WA, pro se.

Marlene Marcellay, Vancouver, WA, pro se.

Sandra Covington, Omak, WA, pro se.

Gabriel Marcellay, Wellpinit, WA, pro se.

Linda Saint, Omak, WA, pro se.

Jeff M. Condon, Omak, WA, pro se.

Mike Marcellay, Brewster, WA, pro se.

Sonia Vanwoerkon, Lewiston, ID, pro se.

Judy Zunie, Omak, WA, pro se.

ORDER GRANTING CONFEDERATED TRIBES OF THE COLVILLE RESERVATION'S MOTION TO DISMISS

ORDER DENYING WAPATO HERITAGE'S MOTION TO TRANSFER OR FOR PARTIAL SUMMARY JUDGMENT

ORDER GRANTING FEDERAL DEFENDANTS' MOTION TO DISMISS WAPATO HERITAGE'S REMAINING CLAIMS

ROSANNA MALOUF PETERSON, United States District Judge

BEFORE THE COURT is the Confederated Tribes of the Colville Reservation's Motion to Dismiss, ECF No. 274, Wapato Heritage LLC's Motion for Transfer Pursuant to 28 U.S.C. § 1631 or for Partial Summary Judgment, ECF No. 572, and the Federal Defendants' Motion to Dismiss Wapato Heritage, LLC's Remaining Crossclaims, ECF No. 570.

On December 10, 2020, the Court heard oral argument on the Federal Defendants' Motion to Dismiss, ECF No. 570. The Federal Defendants were represented by Assistant United States Attorney Joseph Derrig. Nathan J. Arnold appeared on behalf of Wapato Heritage, LLC ("Wapato Heritage"). Brian W. Chestnut appeared on behalf of the Confederated Tribes of the Colville Reservation ("Colville Tribes"). The Court has reviewed the motions, the record, heard oral argument, and is fully informed.

BACKGROUND

In 1984, the Colville Agency, on behalf of the BIA, approved Lease No. 82-21 ("the Master Lease"), leasing MA-8 in its entirety to Mr. William Evans for a period of twenty-five years. ECF No. 574-2.

In 1993, Evans, as Lessee, sublet a portion of MA-8 to the Colville Tribal Enterprise Corporation ("CTEC"), an instrumentality of the Confederated Tribes of the Colville Reservation, for a casino (the "Casino Sublease."). ECF No. 574-3. In 1994, a second sub-lease was entered between Evans and the CTEC when the casino opened. ECF No. 574-4.

When Evans died in 2003, his leasehold interest as the Lessee of MA-8 was acquired by Wapato Heritage, LLC. ECF No. 144 at 9. As of 2005, Wapato Heritage possesses a life estate in Evans's MA-8 allotment interest (approximately 23.8% of MA-8) with the remainder reverting to the Confederated Tribes of the Colville Reservation. Id. at 9 n. 3; see ECF No. 606-1 (Order Approving Settlement Agreement on November 9, 2005, In the Matter of the Estate of William Wapato Evans ).

Under the terms of the Master Lease, Evans, as Lessee, was required to perform and provide an audit and provide the results to the individual allottees, as Lessors, in addition to the Secretary of the BIA. ECF No. 574-2 at 6–7. The audits were required to be performed by a Certified Public Accountant "who must not be an employee of the Lessee." Id.

In 2005, the BIA, through the Sells Group, P.S., performed an agreed upon accounting review under the Master Lease and Casino Subleases. ECF Nos. 228 at 25, 230 at 8. The Sells Group created a December 29, 2005 written report which was provided to the BIA in January 2006. ECF No. 574-1. The BIA allegedly did not immediately send a copy of the Report to Wapato Heritage. ECF No. 230 at 9. Wapato Heritage made a Freedom of Information Act request and received a copy of the Sells Group's report in 2007. ECF No. 574-5.

Wapato Heritage alleges that the report shows that from 19842003 Mr. Evans overpaid the BIA under the Master Lease in the amount $751,285. ECF No. 228 at 25; 574-1 at 4. The monies from the overpayments were allegedly paid to the individual allottees. ECF No. 589 at 3. Wapato Heritage further alleges that the report shows that from 19941998 Mr. Evans was underpaid $886,248 by CTEC under the Casino subleases. ECF No. 228 at 25, 574-1 at 7.

In Wapato I , the Court determined that the Master Lease expired as of February 2009. Wapato Heritage, L.L.C. v. United States , No. 08-cv-177-RHW, 2008 WL 5046447, at *3 (E.D. Wash. Nov. 21, 2008) aff'd by Wapato Heritage, L.L.C. v. United States , 637 F.3d 1033 (9th Cir. 2011). Furthermore, the Court determined that the BIA is not a party to leases of this kind. Wapato Heritage , 2008 WL 5046447, at *5. The Court also determined that the BIA had not breached a fiduciary duty by failing to review a proposal by Wapato Heritage for a 99-year replacement lease where no such duty was owed to Wapato Heritage.

Wapato Heritage, L.L.C. v. United States , No. CV-08-177-RHW, 2009 WL 3782869, at *3–4 (E.D. Wash. Nov. 6, 2009) ("Plaintiff is simply in no position to enforce the Indian landowners' rights as beneficiaries of that trust.").

In March 2009, the BIA and the Colville Tribes allegedly entered into a lease for MA-8 (the "Colville Lease"). ECF No. 589 at 4. Wapato Heritage claims it was neither given notice nor an opportunity to vote on the grant of that lease. Id. at 4–5.

Wapato Heritage claims that the Colville Tribes has operated its casino on MA-8 continuously without the payment of rent to Wapato Heritage since February 9, 2009. ECF No. 228 at 26. Wapato Heritage also alleges that the BIA has not taken any steps to collect from CTEC the alleged deficiency in rent payments due under the Casino Subleases. ECF No. 230 at 9.

On March 26, 2010, Wapato Heritage asserted crossclaims against the Federal Defendants and the Colville Tribes, expanding the scope of the present matter beyond the use of the Mill Bay RV Resort site on MA-8 to monies due under the Master Lease and Casino Sublease. ECF Nos. 170, 228 (Amended). The crossclaims are as follows: (1) Declaratory Relief against all Defendants; (2) Ejectment and/or Wrongful Detainer against all Defendants; (3) Overpayment under Master Lease against all Defendants; (4) Underpayment under Casino Sublease and Failure to Collect against the Federal Defendants; (5) Partition against all Defendants; and (6) Attorney fees and costs against all Defendants. ECF No. 534.

On September 4, 2013, the Chelan County Superior Court entered an Ex Parte Order Making Technical Correction to Final and Binding Settlement Agreement in In Re the Matter of the Estate of William Wapato Evans, Jr. See ECF No. 616-1. The Order states that "[a]ll choses in action, actual or potential, existing at the time of the decedent's death ... [that] were not specifically dealt with in the 2005 Settlement Agreement, or the Final Agreement, or otherwise by orders of this court and they therefore have remained undistributed property of the estate." Id. at 5. Furthermore, the Order stated that "any such claim, made in the name of Wapato Heritage, LLC, ... shall be, and hereby is, deemed in all respects to have been made in the name and stead of the above entitled estate, nunc pro tunc, to the later of the date of the claim, or the date of the 2005 Settlement Agreement." Id.

LEGAL STANDARD

Dismissal of a complaint is proper where the plaintiff fails to state a claim upon which relief can be granted or the court lacks jurisdiction over the suit or the parties. Fed. R. Civ. P. 12(b)(1), (2), (6). A motion to dismiss brought pursuant to Rule 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). In ruling on such a motion, "the court must...

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2 cases
  • Grondal v. United States
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • December 30, 2021
    ...status were dismissed based on the district court's finding that MA-8 remained held in trust by the BIA. See Grondal v. United States , 513 F. Supp. 3d 1262, 1281 (E.D. Wash. 2021).13 The district court's 2010 order merges here with the 2020 order. See United States v. 475 Martin Lane , 545......
  • Kumar v. Schildt
    • United States
    • U.S. District Court — District of Montana
    • September 19, 2022
    ...2021). The court based its dismissal on the fact that “Wapato Heritage is not a person ‘in whole or in part of Indian blood or descent.'” Id. (citing Preston, 352 F.2d at 355-356). Grondal repeated Preston's holding “that § 365 confers no federal jurisdiction over suit by non-Indians.” Id. ......

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