U.S. v. American Horse

• Decision Date: 11 January 2005
• Docket Number: No. A1-04-73.,A1-04-73.
• Citation: 352 F.Supp.2d 984
• Parties: UNITED STATES of America, Plaintiff, v. Julie Ann AMERICAN HORSE, f/k/a Julie Ann Red Bear; Cornelius M. American Horse; Darlene E. American Horse; Mona L. Follet; and Dustin American Horse; Defendants.
• Court: U.S. District Court — District of North Dakota

352 F.Supp.2d 984

UNITED STATES of America, Plaintiff, v. Julie Ann AMERICAN HORSE, f/k/a Julie Ann Red Bear; Cornelius M. American Horse; Darlene E. American Horse; Mona L. Follet; and Dustin American Horse; Defendants.

No. A1-04-73.

United States District Court, D. North Dakota, Southwestern Division.

January 11, 2005.

Kent Rockstad, U.S. Attorney's Office, Fargo, ND, for plaintiff.

Judith H. Roberts, Dakota Plains Legal Services, Fort Yates, ND, Ronald D. Hutchinson, Dakota Plains Legal Services, Mission, SD, for defendants.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

HOVLAND, Chief Judge.

Before the Court is defendant, Julie Ann American Horse's Motion to Dismiss filed on October 4, 2004. American Horse has also made a request for oral argument. The Plaintiff has filed a motion opposing dismissal. For the reasons set forth below, the Court denies the motion.

I. BACKGROUND

On or about November 3, 1999, the plaintiff, United States of America, acting through the Department of Agriculture, Rural Housing Service ("RHS"), loaned defendant Julie Ann American Horse $53,370. The loan is secured with a leasehold mortgage on the American Horse's residence which is located on land in trust status within the boundaries of the Standing Rock Indian Reservation.¹ The mortgage was approved by the Secretary of the Interior on or about June 30, 2000, and recorded in the office of the Register of Deeds of Sioux County, North Dakota, on July 6, 2000. Julie Ann American Horse is a lessee/tenant under the terms of a 25-year lease. She is not the owner of the property. The RHS mortgage is a leasehold mortgage and only the leasehold interest held by American Horse is subject to the mortgage which the Government now seeks to foreclose. American Horse made only one payment in the amount of $2,682.13 on October 15, 2001.

On April 13, 2004, the Government served American Horse and Cornelius M. American² with a Notice of Intention to Foreclose Real Estate Mortgage because they had defaulted on their payment of the promissory note. They were given 30 days to pay the full amount due, or an action for foreclosure of the mortgage would be sought. On June 4, 2004, the Government filed an action in the United States District Court for the District of North Dakota to foreclose the mortgage and collect the proceeds.

II. LEGAL DISCUSSION

The defendant, Julie Ann American Horse, filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. American Horse alternatively argues that the Court should dismiss or stay the proceedings under the doctrine of tribal exhaustion.

A. MOTION TO DISMISS

"The standard for a district court to employ in ruling on a motion to dismiss is clear." Crumpley-Patterson v. Trinity Lutheran Hosp., 388 F.3d 588, 590 (8th Cir.2004). "A district court must accept the allegations contained in the complaint as true, and all reasonable inferences from the complaint must be drawn in favor of the nonmoving party." Id. (citing Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir.1996)). "[D]ismissal is inappropriate `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" McCormack v. Citibank, N.A., 979 F.2d 643, 646 (8th Cir.1992) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "A motion to dismiss should be granted `as a practical matter... only in the unusual case in which there is some insuperable bar to relief.'" Strand v. Diversified Collection Service, Inc., 380 F.3d 316, 317 (8th Cir.2004) (citing Frey v. Herculaneum, 44 F.3d 667, 671 (8th Cir.1995) (quoting Bramlet v. Wilson, 495 F.2d 714, 716 (8th Cir.1974))). "Under the Federal Rules, it is not necessary to plead every fact with formalistic particularity." BJC Health System v. Columbia Cas. Co., 348 F.3d 685, 688 (8th Cir.2003). "A pleading which sets forth a claim for relief ... shall contain a short and plain statement of the claim showing that the pleader is entitled to relief...." Fed.R.Civ.P. 8(a).

The United States submitted a short recitation of the factual allegations contained in the Complaint, which reads as follows:

[T]hat the defendant executed and delivered a promissory note and mortgage to RHS in exchange for a loan; the mortgage was approved by the Secretary of the Department of the Interior; that the defendant defaulted under the terms of the promissory note and mortgage in the she failed to make timely payment; the United State accelerated the account; the United States is still the owner and holder of the promissory note and mortgage; the amount owed as of June 3, 2004, was principal in the sum of $55,587.50, interest in the sum of $10,358.67, with interest accruing thereafter at the rate of 7.125 percent per annum; and the United States served defendants with a Notice of Intention to Foreclose.

See Plaintiff's Response to Defendant's Motion for Summary Judgment, p. 3; Complaint ¶¶ 1-8. The Plaintiff also submitted copies of the promissory note, mortgage, lease, and statement of account.

American Horse's argument is predicated upon 25 U.S.C. § 483a, which provides as follows:

(a) The individual Indian owners of any land which either is held by the United States in trust for them or is subject to a restriction against alienation imposed by the United States are authorized, subject to approval by the Secretary of the Interior, to execute a mortgage or deed of trust to such land. Such land shall be subject to foreclosure or sale pursuant to the terms of such mortgage or deed of trust in accordance with the laws of the tribe which has jurisdiction over such land or, in the case where no tribal foreclosure law exists, in accordance with the laws of the State or Territory in which the land is located. For the purpose of any foreclosure or sale proceeding the Indian owners shall be regarded as vested with an unrestricted fee simple title to the land, the United States shall not be a necessary party to the proceeding, and any conveyance of the land pursuant to the proceeding shall divest the United States of title to the land. All mortgages and deeds of trust to such land heretofore approved by the Secretary of the Interior are ratified and confirmed.

(b) In the event such land is acquired by an Indian or an Indian tribe, such land shall not be removed from trust or restricted status except upon application to the Secretary under existing law.

25 U.S.C. § 483a. American Horse cites to the Eighth Circuit case of Northwest S.D. Prod. Credit Ass'n. v. Smith, 784 F.2d 323 (8th Cir.1986), which addressed 25 U.S.C. § 483a. In Smith, Northwest South Dakota Credit Association ("PCA"), a mortgagee, sought foreclosure and sale of trust land located within the Cheyenne River Sioux Indian Reservation in South Dakota. PCA brought an action in federal court invoking federal question jurisdiction under 28 U.S.C. § 1331, on the grounds that the cases arises out of 25 U.S.C. § 483a. The district court dismissed the suit for failure to state a claim upon which relief can be granted, and concluded "that § 483a does not create a federal cause of action for foreclosure of mortgages on Indian trust land.... The statute secures no federal right." Northwest S.D. Prod. Credit Ass'n. v. Smith, 784 F.2d 323, 326.

Unlike Smith, the United States is not relying on federal question jurisdiction under 28 U.S.C. § 1331. Instead, the United States relies on 28 U.S.C. § 1345, which provides as follows:

Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress.

"Generally, district courts have original jurisdiction over suits brought by the United States to foreclose mortgages on realty situated within the district." United States v. Torres, 142 F.3d 962, 966 (7th Cir.1998) (citing Garden Homes, Inc. v. United States, 200 F.2d 299, 300 (1st Cir.1952)); see United States v. Mosbrucker, 340 F.3d 664, 666 (8th Cir.2003) (holding that district court had jurisdiction to order foreclosure and eviction).

American Horse contends that 25 U.S.C. § 483a constitutes an exception to general jurisdiction, citing the "[e]xcept as otherwise provided by Act of Congress" language contained in 28 U.S.C. § 1345. "When there are statutes clearly defining the jurisdiction of the courts [such as section 1345] the force and effect of such provisions should not be disturbed by a mere implication flowing from subsequent legislation." Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 808, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) (quoting Rosecrans v. United States, 165 U.S. 257, 262, 17 S.Ct. 302, 41 L.Ed. 708 (1897)). "While Congress may displace section 1345 in particular categories of cases if it so desires, courts will not infer such displacement unless Congress has made its intention plain." United States v. District of Columbia, 669 F.2d 738, 741 (D.C.Cir.1981) (citations omitted). Courts have held that any exceptions to the general rule of section 1345 "must be clear and unequivocal." United States v. Commonwealth of Puerto Rico, 551 F.Supp. 864, 866 (D.Puerto Rico 1982).

To support her contention that Congress intended to create an exception to general jurisdiction, American Horse relies on a portion of 25 U.S.C. § 483a which provides:

Such land shall be subject to foreclosure or sale pursuant to the terms of such mortgage or deed of trust in accordance with the laws of the tribe which has jurisdiction over such land or, in the case where no tribal foreclosure law exists, in accordance with the laws of the State or Territory in which the land is located.

The Court is not convinced that ...