In Re: Chapter 12 EState of Harris

Citation218 F.3d 1140
Decision Date07 July 2000
Docket Number99-8030,Nos. 99-8020,s. 99-8020
Parties(10th Cir. 2000) IN RE: CHAPTER 12 ESTATE OF ROBERT NICHOLAS HARRIS, Plaintiff - Appellee, v. BRAD HARRIS; DELIGHT HARRIS; CHARLENE HARRIS; FARM SERVICE AGENCY, UNITED STATES DEPARTMENT OF AGRICULTURE, Defendants-Cross-Claimants - Appellees, v. THE BEVERLY M. MCPHERSON TRUST, formerly known as the Roe M. McPherson Trust, as a successor in interest to Roe M. McPherson, Jr, Defendant-Cross-Defendant-Appellant
CourtU.S. Court of Appeals — Tenth Circuit

Appeal from the United States District Court for the District of Wyoming (D.C. No. 98-CV-83-D) [Copyrighted Material Omitted]

SUBMITTED ON THE BRIEFS:

Ken McCartney of Law Offices of Ken McCartney, P.C., Cheyenne, Wyoming, for Plaintiff - Appellee Robert Nickolas Harris, Jr.

Andrew W. Baldwin of Baldwin & Crocker, P.C., Lander, Wyoming, for Defendants - Cross-Plaintiffs - Appellees Brad Harris, Delight Harris and Charlene Harris.

David D. Freudenthal, United States Attorney, and Nicholas Vassallo, Assistant United States Attorney, Cheyenne, Wyoming, for Defendant/Cross-Plaintiff - Appellee Farm Service Agency, United States Department of Agriculture.

Mark J. White and Jill E. Kucera, of White, White & Kucera, P.C., Riverton, Wyoming, for the Appellant.

Before LUCERO, Circuit Judge, MCWILLIAMS, Senior Circuit Judge and BROWN*, Senior District Judge.

LUCERO, Circuit Judge.

This case involves ownership interests in approximately 200 head of cattle bearing multiple brands; it requires us to ascertain the effect of re-branding, under Wyoming's cattle branding statutes, on those interests, which are subject to a share agreement, a security interest, and, according to appellant, its judgment lien. Although the facts of this case are somewhat peculiar, involving questions of the rights of a judgment creditor in re-branded cattle and the effect of tribal grazing regulations, we find guidance in the opinions of other courts, which have considered the seemingly common situation of creditors attempting to assert security interests in animals run, but not owned, by a debtor pursuant to an agreement with a third party. Based on those precedents and the record before us, we conclude the district court did not err in granting summary judgment on the questions of ownership and estoppel. We exercise jurisdiction pursuant to 28 U.S.C. 1291 and Fed. R. App. P. 4(a) and affirm.

I

The precise number of cattle involved is 181: 172 currently branded with the "J-N-J" and "M-V" brands, and nine branded with "Arrows" and "W Diamond" brands. (Appellant's App. at 3-4.) To separate the interests therein, we begin by exploring the history of the various parties' relations.

In 1991, Roe McPherson, predecessor in interest to defendant-appellant the Beverly McPherson Trust, obtained a default judgment against Robert Nicholas Harris ("Nick Harris") in the Wind River Court of Indian Offenses of the Shoshone and Arapahoe Tribes, Fort Washakie, Wyoming. This judgment is now worth, after the accrual of interest, approximately $100,000.

Brad and Charlene Harris are adult children of Nick Harris; Delight Harris is the wife of Brad Harris. The Harrises are enrolled members of the Wind River Indian Reservation. Nick and Charlene have their own registered livestock brands, as do Brad and Delight together. As of the relevant events in this case, Brad and Delight Harris were engaged in the cattle business. In the course of this business, in 1994 and 1995, the Farm Service Agency of the United States Department of Agriculture ("FSA")1 loaned Brad and Delight Harris $194,000 to purchase 172 head of cattle, on which FSA filed financing statements.2 The financing statements did not identify Nick Harris as debtor nor his brands as collateral. Brad and Delight initially branded the cattle with their brands.

In 1997, Brad and Nick Harris arranged for Nick Harris to graze the cattle on his allotment on the Wind River Indian Reservation. The two memorialized their arrangement in an unrecorded "partido" or share agreement,3 providing for "a 60/40 split on the calf sales only," with 60% going to Nick and 40% to Brad. (Appellant's App. at 69.) The agreement further provided that "[t]he cows will be branded with Nick's 'J-N-J' . . . brand on the right hip," but that "[a]ll of Brad and Delight's cattle will still have the 'M-V' . . . brand on the left hip." (Id.) Brad and Delight characterized the purpose of this arrangement as reducing their expenses on the cow herd, while giving Nick Harris an incentive to care for the cows and calves based on his interest in the calf crop.

Brad and Delight Harris proposed this arrangement to FSA, characterizing it as "a 60-40 split on the calf crop only." (Id. at 71.) In correspondence with the FSA, they stated that "[d]ue to regulations the cattle will have to have the brand of the allotment holder," Nick Harris, but stated that "the FSA's security interest in the cows will not be compromised." (Id.) Pursuant to this arrangement, they gave to FSA Credit Supervisor Carl Ericsson a blank brand transfer document.

In accordance with the share agreement, Brad and Delight's 171 cattle were branded on one hip with Nick Harris's brand (the "J-N-J" brand) but retained Brad and Delight's brand (the "M-V" brand) on the opposite hip. The additional nine cattle were apparently branded with Nick Harris's "W Diamond" brand but retained Charlene Harris's "Arrows" brand. Prior to relocating the cattle, Nick Harris executed but did not record a transfer of the "J-N-J" brand to Brad and Delight Harris. The cattle were then relocated to graze under the supervision of Nick Harris on reservation lands.

At the time of seizure of the cattle, Nick Harris held a Bureau of Indian Affairs ("BIA") grazing permit to graze animals on Indian and federal lands, as well as an assignment from the Shoshone and Arapahoe Tribes to graze cattle on certain lands. These permits and assignments, pursuant to tribal and BIA rules, provided that only livestock owned by the holder could be run on the land in question.

By means not apparent from the record before us, the Trust learned of Nick Harris's possession of the cattle and went to tribal court in an attempt to seize them and have them sold to satisfy its judgment. On January 22, 1998, the tribal court entered an "Order in Aid of Execution" of judgment providing for seizure of any livestock bearing Nick Harris's brands. Following inspection by a brand inspector, who stated the cows were branded with "relatively fresh" brands registered under the name of Nick Harris (id. at 27), and a lien search which identified no liens tied to cattle bearing Nick Harris's brands, the Trust seized the cattle. Following the seizure, Nick Harris transferred the "J-N-J" brand to Brad and Delight Harris.4

Nick Harris unsuccessfully sued in tribal court, seeking return of the cattle or a stay of their sale. Brad and Charlene Harris attempted, also unsuccessfully, to intervene in the trial court proceeding. In April of 1998, Nick Harris filed for bankruptcy.

Upon filing of the bankruptcy proceedings, the Trust filed an adversary proceeding to determine the extent and validity of claims against the cattle. The bankruptcy court determined the matter should be heard by the district court in a non-bankruptcy forum, and defendants Brad, Charlene, and Delight Harris, as well as FSA and Norwest Bank of Gillette, were made parties to the suit. The parties filed cross-motions for summary judgment in district court, which, after hearing oral argument, entered a telephonic oral ruling in favor of defendants on the parties' cross-motions for summary judgment.

The Trust raised various arguments, including estoppel and res judicata theories, in support of the position that it enjoyed a judgment lien against the cows based on the outstanding judgment against Nick Harris. Responding to the Trust's claim that the tribal court ruling made ownership of the cattle a matter subject to the doctrine of res judicata, the district court found

that Brad and Delight Harris and the United States were not parties to the tribal court action. Therefore, res judicata does not preclude advancement of their claims.

(Id. at 134.)5

Addressing Trust's judicial estoppel claims, the court rejected them on the ground that Brad and Delight Harris had never, unlike Nick Harris, advanced the claim that Nick Harris owned the cattle. The court then inquired: Who owns the cattle, Nick Harris or Brad, Delight, and Charlene Harris? In answering this question, the court accurately and succinctly summarized the threshold issue in this case:

If Nick Harris owns the cattle or owned them when they were seized, the trust may proceed against the cattle to satisfy its default judgment against Nick Harris. On the other hand, if the Harris children own the cattle, the trust may not proceed against them, and the cattle are subject to their original security interests.

(Id. at 135.) Concluding that Nick Harris's brand on the cattle, combined with his running the cattle on tribal land under tribal regulations, created a "strong presumption" of his ownership of the animals, the district court nevertheless found the remaining record evidence "overwhelmingly demonstrates that ownership remained in Brad, Delight and/or Charlene Harris." (Id. at 136.) The court further found, without extensive discussion, "that the purchase money security interest held by the United States in this case was not affected by the relocation or additional branding of the cattle." (Id. at 139.) The Trust now appeals.

II

This Court has jurisdiction pursuant to 28 U.S.C. 1291 and Fed. R. App. P. 4(a). Appellant's notice of appeal was filed on February 17, 1999, sixty-one days after the entry of judgment. See Fed. R. App. P. 4(a)(1)(B). On March 16, 1999, this Court issued an order to show cause why the appeal should not be summarily dismissed as untimely. Shortly thereafter, on March 22, ...

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