Heritage v. U.S.

• Decision Date: 22 March 2011
• Docket Number: No. 09–36150.,09–36150.
• Parties: WAPATO HERITAGE, L.L.C., Plaintiff–Appellant,v.UNITED STATES of America; United States Department of the Interior; United States Bureau of Indian Affairs, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

637 F.3d 1033

11 Cal. Daily Op. Serv. 3438

2011 Daily Journal D.A.R. 4181

WAPATO HERITAGE, L.L.C., Plaintiff–Appellant,

v.UNITED STATES of America; United States Department of the Interior; United States Bureau of Indian Affairs, Defendants–Appellees.

No. 09–36150.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 13, 2011.Filed March 22, 2011.

R. Bruce Johnston, Law Office of R. Bruce Johnston, PS, Bainbridge Island, WA, for the plaintiff-appellant.Andrew S. Biviano, Assistant United States Attorney, Spokane, WA, for the defendants-appellees.Appeal from the United States District Court for the Eastern District of Washington, Robert H. Whaley, Senior District Judge, Presiding. D.C. No. 2:08–cv–00177–RHW.Before: SUSAN P. GRABER and MILAN D. SMITH, JR., Circuit Judges, and CHARLES R. BREYER,^* District Judge.

OPINION

M. SMITH, Circuit Judge:

Plaintiff–Appellant Wapato Heritage, L.L.C. (Wapato), appeals the district court's order denying its motion for summary judgment and motion for reconsideration, and granting Defendants–Appellees' motion for summary judgment and motion to dismiss. We address whether Wapato's predecessor-in-interest, William Wapato Evans, Jr. (Evans), effectively exercised his option to renew a lease agreement (Lease) between Evans and certain Native American landowners (Landowners) covering real property known as Moses Allotment No. 8 (MA–8). The district court ruled that Evans did not comply with the Lease's requirements that he notify all the Landowners that he intended to renew the Lease. Wapato, the current holder of all the Lessee's rights under the Lease, timely appealed. We have jurisdiction under 28 U.S.C. § 1291.

Wapato argues on appeal that the terms of the Lease are ambiguous as to whether the Bureau of Indian Affairs (BIA) was a Lessor under the Lease, therefore precluding summary judgment. We hold that the Lease is not ambiguous and that the BIA was not a Lessor under the Lease. We also hold that Evans (and later Wapato) failed to provide the required notice to the Landowners and thus did not effectively exercise the option to renew the Lease. Wapato's other claims of error are addressed in a memorandum disposition filed contemporaneously with this opinion. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In 1907, the United States granted MA–8 to Wapato John as part of an agreement between the Moses Band and the Secretary of the Interior (Secretary). The United States holds MA–8 in trust for Wapato John and his heirs, one of whom was Evans. Evans's grandsons are currently the sole owners of Wapato Heritage, L.L.C. The Department of the Interior (Department), which has delegated its authority to the BIA, administers MA–8. The Colville Agency (Agency) is a local BIA agency, located in Nespelem, Washington.

In 1982, Evans owned an approximate 5.4% beneficial interest in MA–8, and sought to negotiate a 25–year ground lease of all the landowner rights in MA–8. Sixty-four percent of the Landowners (including Evans) eventually consented to the Lease. A majority of the Landowners signed a “Statement of Awareness,” which outlined the material provisions of the Lease and authorized the Superintendent of the Agency to execute the Lease on their behalf pursuant to 25 C.F.R. § 162.2[ (a) ](5). In due course, the Secretary authorized George Davis, the Superintendent, to sign the Lease. Pursuant to that authority, Davis approved the Lease (Lease No. 82–21) on February 2, 1984, on behalf of the consenting Landowners, the remaining 36% of the trust beneficiaries, and the Secretary. The Lease was executed in conformity with 25 U.S.C. § 415 and Part 162 of the implementing regulations.

The Lease contains an option to renew, which reads as follows:

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 (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 leas[t] twe[l]ve (12) months prior to said expiration of original term.

The Lease defines Evans as “Lessee” and the individual landowners, and/or the guardians of those individuals, whose names and addresses are listed in Exhibit A to the Lease, as “Lessor.”

Section 29 of the Lease provides:

PAYMENTS AND NOTICES:

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 b[y] certified mail, return receipt requested. The service of any such notice shall be deemed complete within ten (10) days after mailing in any post office within the United States. Copies of all notices and demands shall be sent to the Secretary in care of the office of the Bureau of Indian Affairs, P.O. Box 111, Nespelem, Washington 99155. All notices to Lessor shall be sent to the landowners. The Secretary shall furnish Lessee with the current names and addresses of Lessor upon the request of Lessee.

On January 30, 1985, Evans sent a letter to the BIA, stating, among other things:

In accordance with paragraph three (3) of the subject lease dated February 2, 1984, you are notified by receipt of this letter that Mar–Lu, Ltd. hereby exercises its option to renew the subject lease for a further term of twenty five (25) years to be effective at the expiration of the original twenty five (25) year term. This notice extends the total term of subject lease to February 1, 2034.

The letter was signed by Evans as “General Partner[,] Mar–Lu, Ltd.” As Wapato concedes, Evans's letter was not sent to the BIA by certified mail, nor was it sent at all to the Landowners referred to in Exhibit A to the Lease.

In 2007, after Wapato began efforts to develop a major residential development on MA–8, the Colville Confederated Tribe (Tribe) questioned whether Evans had effectively exercised his option to renew the Lease. The Tribe sent a letter to the BIA requesting a meeting to “discuss the current legal status of the 25–year extension.” In response, the BIA reviewed the Lease terms and relevant correspondence. The BIA then sent a letter to the Tribe and Wapato on November 30, 2007, stating that, in its opinion, the option to renew had not been exercised effectively by Evans's 1985 letter. The BIA's opinion rested, in part, on Evans's failure to send notice to the individual Landowners.

As of November 30, 2007, Wapato still had two months left in which to exercise its option to renew the Lease. Whatever the deficiencies of Evans's previous efforts, Wapato could have obviated the issues before us had it taken the steps necessary to do so.

Instead of taking those steps during the remaining exercise period, Wapato's counsel sent a letter to the BIA on December 18, 2007, contending that the term of the Lease had already been properly extended and claiming that the BIA had already acknowledged the extension. Wapato's letter also was sent to seven Landowners who, Wapato claims, were the only ones for which it had addresses. Wapato did not request that the BIA provide it with the “current names and addresses of Lessor,” as permitted in Section 29 of the Lease. Wapato's letter was not sent via certified mail to either the BIA or those Landowners for whom it had addresses. When Wapato did not receive a response, it sent another letter to the BIA on January 7, 2008, requesting a response.

On August 7, 2008—by then more than six months after the deadline to exercise the option to renew the term of the Lease—the BIA sent a letter confirming that Evans had not properly exercised his option to renew the Lease. Wapato appealed the BIA's decision, but the Northwest Regional Director of the BIA upheld the agency's decision on October 31, 2008.

On November 21, 2008, after considering the parties' respective arguments, the district court issued an order granting the United States' partial cross-motion for summary judgment in part and denying Wapato's motion for partial summary judgment. The district court subsequently denied Wapato's motion for reconsideration and disposed of the remaining issues in the case.¹ This timely appeal followed.

STANDARD OF REVIEW

A district court's grant of summary judgment is reviewed de novo. Travelers Prop. Cas. Co. of Am. v. ConocoPhillips Co., 546 F.3d 1142, 1145 (9th Cir.2008). “We must determine whether, viewing the evidence in the light most favorable to the nonmoving party, any genuine issues of material fact exist, and whether the district court correctly applied the relevant substantive law.” Northrop Grumman Corp. v. Factory Mut. Ins. Co., 563 F.3d 777, 783 (9th Cir.2009) (internal quotation marks omitted).

DISCUSSION

Wapato argues that there is a genuine issue of material fact as to whether the Landowners are really the Lessor under the Lease, because the Lease is ambiguous. It argues primarily that the BIA did not present at summary judgment a copy of “Exhibit A” to the Lease, which allegedly contained the names and current locations of the Landowners. We disagree with Wapato's arguments.

The BIA is entrusted with managing and protecting Native American interests. See, e.g., 25 U.S.C. § 2 (“The Commissioner of Indian Affairs shall, under the direction of the Secretary of the Interior ... have the management of all Indian affairs and of all matters arising out of Indian relations.”); McDonald v. Means, 309 F.3d 530, 538 (9th Cir.2002) (“It is well established that the BIA holds a fiduciary relationship to Indian tribes, and its management of tribal [interests] is subject to the same fiduciary duties.” (citing United States v. Mitchell, 463 U.S. 206, 224–26, 103 S.Ct. 2961, 77 L.Ed.2d...