Smith v. Hopland Band of Pomo Indians, A093277.

• Decision Date: 09 January 2002
• Docket Number: No. A093277.,A093277.
• Citation: 115 Cal.Rptr.2d 455,95 Cal.App.4th 1
• Court: California Court of Appeals Court of Appeals
• Parties: Bodrell Joer'dan SMITH, Plaintiff and Appellant, v. HOPLAND BAND OF POMO INDIANS, et al., Defendants and Respondents.

115 Cal.Rptr.2d 455

95 Cal.App.4th 1

Bodrell Joer'dan SMITH, Plaintiff and Appellant, v. HOPLAND BAND OF POMO INDIANS, et al., Defendants and Respondents.

No. A093277.

Court of Appeal, First District, Division 1.

January 9, 2002.

As Modified on Denial of Rehearing February 6, 2002.

Law Offices of Eugene L. Bass, Eugene L. Bass, Redwood City, for Appellant.

Rapport & Marston, Lester J. Marston, Ukiah, for Respondents.

STEIN, Acting P.J.

Bodrell Joer'dan Smith (Smith) appeals an order sustaining, without leave to amend, the Hopland Band of Pomo Indians' (Tribe's) demurrer, and granting the Tribe's motion to dismiss¹ Smith's second-amended complaint. The court held that the Tribe had not waived its sovereign immunity, by entering into a contract containing an arbitration clause, and agreeing to the application of California law, because a Tribal ordinance provided that its sovereign immunity could only be waived by an ordinance or resolution of the Tribal Council explicitly waiving immunity.

We shall reverse, and remand to the trial court.

FACTS

Smith is an architect. On July 30, 1999, and September 27, 1999, he entered into two contracts with the Tribe to provide planning and architectural services related to development of Indian land, including a new casino and hotel. After a dispute arose over performance and payment, Smith filed a complaint in Mendocino County Superior Court seeking to recover unpaid fees of over $800,000. A copy of each of the contracts was attached to the complaint. The contracts included the American Institute of Architects Standard Form of Agreement Between Owner and Architect, AIA Document A141. Article 7 provides, in relevant part:

"7.1 Claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof shall be subject to and decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise."

"7.3 .. . The foregoing agreement to arbitrate ... shall be specifically enforceable in any court having jurisdiction thereof.

"7.4 The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof."

Article 9 further provides:

"9.1 Unless otherwise provided, this Agreement shall be governed by the law of the principal place of business of the Architect." Smith's address was listed as Palo Alto, California.

After Smith voluntarily dismissed his causes of action against individual Tribe members, the Tribe filed a motion to quash service of summons, demurrer, and motion to dismiss, on several grounds, including the assertion of sovereign immunity. In support of the motion, it submitted, among other things, a certified copy of a Tribal ordinance, passed on February 23, 1999, which provided, in pertinent part:

"2.070 Sovereign Immunity of the Tribe. Except as otherwise provided by a duly enacted Ordinance of the Hopland Tribal Council or a Resolution of the Hopland Tribal Council adopted pursuant to such authorizing Ordinance, explicitly waiving the Tribe's sovereign immunity from unconsented suit, the Hopland Band of Pomo Indians:

"A. Does not consent to be sued and is not subject to suit in any administrative or court proceeding; and

"B. Is not liable for any act or omission of any Tribal officer, elected official, Tribal employee, or any other person, organization, or entity owned or operated by the Tribe."

The court denied the motion to quash and motion to dismiss, and sustained the demurrer with leave to amend as to some causes of action and without leave to amend as to others. On the issue of sovereign immunity, it followed a line of authority represented by Sokaogon Gaming Enterp. v. Tushie-Montgomery Assoc. (7th Cir.1996) 86 F.3d 656 which held that similar contract language agreeing to arbitration, and enforcement in any court of competent jurisdiction, is an explicit waiver of sovereign immunity. The trial court further noted that the Tribe had not disputed the authority of the Tribal Chairperson to sign the contract, and it therefore did not consider what effect the sovereign immunity ordinance might have had.

Smith filed a second amended complaint alleging three causes of action for breach of contract. The Tribe filed another demurrer, or motion to dismiss. This time, the Tribe did argue, among other things,² that in accordance with the tribal sovereign immunity ordinance, Sandra Sigala, the Tribal Chairperson who signed the contracts did not have the authority to waive the Tribe's sovereign immunity in the absence of an ordinance, or resolution pursuant to such ordinance, explicitly waiving sovereign immunity. The Tribe submitted the declaration of Sandra Sigala, authenticating the sovereign immunity ordinance. Brian Yepez, the Tribe's treasurer, declared that although the Tribal Council passed a resolution approving the contract, it did not understand the arbitration clause to constitute a waiver of the Tribe's sovereign immunity, and that the resolution approving the contract, "did not contain authorization ... to waive the Tribe's sovereign immunity or approve a contract waiving the Tribe's sovereign immunity."

In opposition, Smith filed his own declaration, stating that on September 14, 1999, he was present at a meeting of the Tribal Council, during which it authorized, by unanimous vote, Sandra Sigala to negotiate and execute contracts with Smith. At that same meeting, Smith gave each Tribal Council member a copy of each of the contracts that he had presented, and left three signed originals, all of which contained the same AIA B141, standard form 1 arbitration clauses that were included in the final contacts. He was also present at a Tribal Council meeting on September 27, 1999, during which all members present participated in negotiating and modifying the wording of the two agreements.

On October 10, 2000, the court filed its order on the demurrer and motion to dismiss. It, preliminarily, observed that the assertion of sovereign immunity, and the claim of waiver, presented a question affecting its subject matter jurisdiction, and that it therefore was appropriate to consider the declarations submitted, to the extent that they related to the issue of sovereign immunity, and resolve any conflicts necessary to determine whether it had jurisdiction.³ The court ruled that the sovereign immunity ordinance requires that the Tribal Council pass an ordinance, or resolution, explicitly waiving its sovereign immunity. It further held that the fact that the Tribal Council members were aware of the contract, and its terms, when it authorized Sigala to sign it, did not constitute a waiver of sovereign immunity because the Council did not pass an ordinance or resolution explicitly waiving its sovereign immunity. It therefore sustained the demurrer without leave to amend, and granted the motion to dismiss, with directions for the Tribe's counsel to prepare, and submit an appropriate order.⁴ Smith filed a notice of appeal on November 27, 2000.

ANALYSIS

While this appeal was pending, the United States Supreme Court, in C & L Enterprises v. Potavatomi Indian Tribe (2001) 532 U.S. 411, 121 S.Ct. 1589 (hereafter C & L Enterprises), resolved the split of authority that had emerged in the state and federal courts⁵ on the question whether, by agreeing to an arbitration clause, and to enforcement of an arbitral award, "`in any court having jurisdiction thereof,'" a tribe has waived its sovereign immunity from suit. The Court concluded that agreement to such contract language constitutes an explicit waiver, of tribal sovereign immunity. (C & L Enterprises, at p. 421, 121 S.Ct. at pp. 1595-1596.) As we shall explain, the contract in this case is indistinguishable from the contract in C & L Enterprises, supra, and the only reasonable interpretation of its terms is that it clearly, and explicitly waives tribal sovereign immunity.

The Court, in C & L Enterprises, supra, focused on two key contractual provisions which, in all material respects, are identical to the arbitration clause, and choice of law provision included in the contract between appellant and respondent. The arbitration clause in C & L Enterprises, supra, provided: "`All claims or disputes ... shall be decided by arbitration in accordance with the Construction [I]ndustry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise.... The award rendered by the arbitrator shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.'" (C & L Enterprises, supra, 532 U.S. at p. 411, 121 S.Ct. at pp. 1592-1593.) The Court noted that, "[t]he American Arbitration Association Rules to which the clause refers provide: `Parties to these rules shall be deemed to have consented that judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof" (Ibid.)

The choice of law provision selected Oklahoma law. Oklahoma, like California,⁶ has adopted a provision of the Uniform Arbitration Act which provides that "`[t]he making of an agreement ... providing for arbitration in this state confers jurisdiction on the court to enforce the agreement under this act and to enter judgment on an award hereunder,'" and which further defines, "`court' as `any court of competent jurisdiction of this state.'" (C & L Enterprises, supra, 532 U.S. at p. 411, 121 S.Ct. at p. 1593; see also Cal.Code Civ. Proc. §§ 1293, 1287.4).

The Court rejected the conclusion of the Oklahoma Court of Appeals, that the contract language constituted only a waiver by implication, because the contract did not use the words "sovereign immunity," or expressly state that the defense of...