Warburton/Buttner v. Superior Court
| Decision Date | 26 November 2002 |
| Docket Number | No. D040158.,D040158. |
| Citation | 127 Cal.Rptr.2d 706,103 Cal.App.4th 1170 |
| Parties | WARBURTON/BUTTNER, Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent; The Tunica-Biloxi Tribe of Louisiana, Real Party in Interest. |
| Court | California Court of Appeals Court of Appeals |
Fox, Johns, Lazar, Pekin & Wexler, George C. Lazar, San Diego, Michael H. Wexler; and Donald Juneau for Real Party in Interest.
In this petition for writ of mandate brought by Warburton/Buttner, a limited partnership that develops and manages commercial real estate on Indian land (Warburton), significant issues are raised concerning the showing required to establish an express authorization of an Indian tribe's waiver of its sovereign immunity from suit. In addition to the defendant and real party in interest, Tunica-Biloxi Tribe of Louisiana (the Tribe), Warburton's action for breach of contract and fraudulent or negligent misrepresentation names as a defendant a limited liability company of which the Tribe is a member, First Nation Gaming, LLC (First Nation), and makes alter ego allegations about First Nation and the Tribe. The petition arises out of the trial court's denial of Warburton's motions to compel discovery of information from the Tribe regarding subject matter jurisdiction issues in connection with Warburton's efforts to prepare opposition to a pending motion for summary judgment brought by the Tribe on the sovereign immunity issue. (Code Civ. Proc., § 437c.)1
The challenged order denying the motions to compel discovery made findings that the Tribe had not effectively waived its right to sovereign immunity, and further, that any order of the court as requested by Warburton in this discovery motion would be void for lack of subject matter jurisdiction. Thus, the order denying the requested discovery also served to grant the Tribe's summary judgment motion in advance of its scheduled hearing date, and without allowing any opposition.
In opposition to the petition for writ of mandate, the Tribe has filed an answer and a motion to dismiss, again asserting a lack of subject matter jurisdiction in the California courts of Warburton's action for breach of contract and misrepresentation, due to sovereign immunity of the Tribe that was not properly or adequately waived. As we will show, the motion to dismiss presents the same questions as the petition. We find the trial court's ruling was both substantively and procedurally flawed, and we grant the petition with directions, first, to allow the requested discovery regarding subject matter jurisdiction to proceed, and second, to allow the Tribe to renotice its motion for summary judgment on the jurisdictional question, if it wishes to do so. Depending upon the outcome of those proceedings, the trial court must determine if the related discovery on the merits of the allegations must also be permitted and reschedule the trial date accordingly.
Warburton's allegations of breach of contract and misrepresentations arise out of an Agreement entered into October 4, 1999 between Warburton, First Nation, and the Tribe (the Agreement), pursuant to which Warburton referred certain gaming opportunities with designated Indian tribes to First Nation. These gaming opportunities are projects involving the planning, creation and operation of casinos and related facilities. First Nation is a Delaware limited liability company of which the Tribe is a member, owning 51 percent as of the time of the filing of the complaint. (See Corp.Code, § 17000 et seq., similar California law governing limited liability companies.) In return for these referrals, First Nation agreed to pay Warburton a flat fee per project and 10 percent of gross management fees. The Agreement provided that it was to be governed by the laws of the state of California and contained the following language regarding tribal sovereign immunity:
"Because it may be determined by a court of competent jurisdiction that First Nation is a tribally controlled entity, Tunica-Biloxi hereby agrees that it will not assert its tribal immunity in any action brought by [Warburton] to enforce any or all provisions of this agreement."
The Agreement, as executed by the three parties, Warburton, First Nation, and the Tribe, shows there was originally another related provision that was stricken out by interlineation, as follows: "The Tunica-Biloxi Tribal Resolution waiving its sovereign immunity in any action brought by [Warburton] against First Nation is attached hereto as Addendum `A'." It is not disputed that no such addendum was ever executed or attached, although it is heavily disputed whether the parties mutually intended that this be done. The Agreement, paragraph 7.2, further states that it is not "intended as an admission by [Warburton] that First Nation enjoys the Tunica-Biloxi Tribe's sovereign immunity."
The Agreement was signed on behalf of the Tribe by the tribal council chairman, Earl J. Barbry, Sr., in the presence of four of the other six tribal council members: Marshall Pierite, Alfred Barbre, Harold Pierite and David Rivas, Jr. The signing took place in a meeting room at the casino (the Hall of the Chiefs), as opposed to the Tribal Council Chamber at which tribal council meetings were ordinarily held.
Disputes arose about the performance of the Agreement and in August 2001, Warburton filed this complaint for damages for breach of contract, fraud, negligent misrepresentation and an accounting. The Agreement was attached as an exhibit to the complaint. The complaint makes allegations that the Tribe was an alter ego of First Nation, in that the Tribe managed and controlled it, it was undercapitalized, monies were commingled between the Tribe and First Nation, and necessary corporate formalities were not observed.
In January 2002, the Tribe brought a demurrer and motion to dismiss based on lack of subject matter jurisdiction, due to the lack of a tribal resolution expressly waiving sovereign immunity. The Tribe's points and authorities acknowledge the waiver paragraph was conditional and the stated condition was unclear (whether the Tribe was precluded from raising sovereign immunity only if a court found First Nation to be tribally controlled). The declaration of the tribal council member who was the custodian of records, and who was present at the signing of the Agreement, stated there was no such resolution and the chairman was not authorized to waive sovereign immunity by signing the Agreement. No information is included about the procedures for calling a noticed meeting of the tribal council and whether such notice could be waived by the participants, if sufficient in number.
In opposition to the motion to dismiss, Warburton submitted its representative Hank Quevedo's declaration, giving his account of the signing of the Agreement in the presence of five members of the seven-person tribal council. Quevedo's declaration stated that all those present went through the Agreement reading each paragraph out loud, and he explained that the reason the second sentence of paragraph 7.2 was stricken was because the resolution waiving sovereign immunity was not ready and therefore could not be attached as an exhibit to the Agreement. Quevedo suggested at the time that since the majority of the tribal council was present, Chairman Barbry could ask for the resolution at the meeting, but the chairman told him he would have to call a formally noticed meeting of the tribal council to do so, "but not to worry about it and that it would be taken care of soon." None of the tribal council members present objected. Quevedo asked chairman Barbry about the resolution four or five times, and was told it would be taken care of, but this never occurred.
The trial court (Judge Zvetina, who has since retired) overruled the demurrer and denied the motion to dismiss, and the order stated, "There is a factual issue raised by the presence of the majority of the Tribal Members [Council] at the execution of the agreement in determining whether a formal resolution was required in order to find a waiver of sovereign immunity." The Tribe then filed its answer, asserting a number of affirmative defenses relating to excuse from or prevention of performance among others, and reiterating its objection to subject matter jurisdiction.2
Warburton served a total of seven discovery requests on the Tribe. The first four discovery requests were directed to the issue of sovereign immunity, and sought information about the circumstances of the signing of the Agreement on October 4, 1999 and events related thereto, and production of documents such as resolutions, ordinances, delegations of authority or other documents pertaining to the waiver of sovereign immunity. In addition, Warburton served requests for admission relating to the authority of the chairman of the Tribe to sign the October 4, 1999 Agreement. Warburton also served notices of deposition of the tribal council members present at the signing of the Warburton/First Nation/Tribe Agreement. The next three discovery requests pertained to nonjurisdictional issues, about the circumstances and events related to the negotiation and performance of the Agreement and its alleged breach, and any documents supporting the affirmative defenses pled in the Tribe's answer.
In April 2002, the Tribe served partial answers and objections to the discovery requests. The Tribe did not respond to the requests for admission, which Warburton interpreted as entitling it to an order that the truth of the matters requested therein be deemed admitted. (§ 2033, subd. (k).) In the Tribe's view, it gratuitously provided certain information, such as the affidavits of the tribal council members present at the signing of the Warburton/First Nation/Tribe Agreement, stating that no tribal resolution was...
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