Wippert v. Blackfeet Tribe of Blackfeet Indian Reservation

• Decision Date: 16 September 1993
• Docket Number: No. 92-531,92-531
• Parties: Verlin F. WIPPERT and Loretta L. Wippert, Plaintiffs and Appellants, v. The BLACKFEET TRIBE OF the BLACKFEET INDIAN RESERVATION, Defendant and Respondent.
• Court: Montana Supreme Court

Page 420

859 P.2d 420

260 Mont. 93

Verlin F. WIPPERT and Loretta L. Wippert, Plaintiffs and Appellants, v. The BLACKFEET TRIBE OF the BLACKFEET INDIAN RESERVATION,

Defendant and Respondent.

No. 92-531.

Supreme Court of Montana.

Submitted on Briefs June 10, 1993.

Decided Aug. 25, 1993.

Rehearing Denied Sept. 16, 1993.

Seldon S. Frisbee, Cut Bank, for plaintiffs and appellants.

Jean Bear Crane, Blackfeet Legal Dept., Browning, for defendant and respondent.

HARRISON, Justice.

Loretta and Verlin Wippert (Wipperts) appeal from an order of the Ninth Judicial District Court, Glacier County, granting the Blackfeet Tribe's motion to dismiss the Wipperts' claims, which originally took the form of a declaratory judgment action filed in the District Court in 1977. We affirm.

This is the Wipperts' third appeal to this Court. After the first appeal, we remanded the case to the District Court for further proceedings. Wippert v. Blackfeet Tribe (1982), 201 Mont. 299, 654 P.2d 512 (Wippert I ). On remand, the District Court entered judgment for the Tribe and the Wipperts appealed again. We reversed. Wippert v. Blackfeet Tribe (1985), 215 Mont. 85, 695 P.2d 461 (Wippert II ). The Tribe then moved to dismiss for lack of subject matter jurisdiction, leading to the appeal now before us (Wippert III ).

Following is the history of this case so far as it is relevant to the subject of the present appeal and to the issue of subject matter jurisdiction.

Wippert I

In 1974 the Wipperts, who owned a 2,400-acre ranch on the Blackfeet Reservation, borrowed $46,773 from the Blackfeet Tribe. The loan was secured by "all cattle now owned or hereafter acquired by the [Wipperts]," and the security agreement provided that the debtors would have at least five days' notice of any sale of the collateral. The loan, plus interest at ten percent, was due on November 1, 1975, but on that date the Wipperts had paid only $2,043 on the principal.

On March 8, 1976, the Tribe notified the Wipperts that they were in default and that the Tribe intended to have the cattle picked up and taken to market, pursuant to the security agreement. The Tribe moved the cattle to another ranch on March 12, 1976, to be held until they could be sold. On April 15, 1976, the Tribe obtained a judgment in the Blackfeet Tribal Court for $44,730, authorizing the Tribe to sell the cattle and apply the proceeds of the sale first to the cost of feeding and shipping the cattle, and second to the judgment balance. Notice of this judgment was filed with the Glacier County clerk and recorder on April 21, 1976.

The cattle were sold at public auction in Shelby, Montana, on April 19, 1976, for $38,400, of which $27,031 was applied to the principal balance due on the Wipperts' loan. Two months later, the Wipperts agreed to sell their ranch to a third party (the Robertsons), but when the Robertsons discovered the Tribe's notice of judgment they refused to accept title. The Wipperts then agreed to hold $20,000 from the sale of the property in an interest-bearing escrow account, pending release of the tribal court judgment. If necessary to clear the judgment, the money was to be used for that purpose; otherwise, it was to be returned to the Wipperts. Because of this agreement, a title insurance policy was issued without listing the tribal court judgment as an exception. The ranch was conveyed to the Robertsons on July 1, 1976.

On June 29, 1977, the Wipperts filed a declaratory judgment action against the Tribe, the Robertsons, and the title company's agent, asking the District Court to quiet title to the real property in the Robertsons and to declare, among other things, that the Tribe had no right, title or interest in, nor any lien or encumbrance on the real property or the $20,000 escrow account. The complaint alleged that the Tribe's judgment was void as to the Wipperts because it was obtained through fraud and because the Wipperts had been deprived of their property--the collateral--without due process of law.

In its answer, the Tribe counterclaimed for $17,172, the amount still due on the Wipperts' loan, and raised as an affirmative defense the District Court's lack of jurisdiction over the Blackfeet Tribe. The Tribe asserted that it had not consented to the District Court's jurisdiction and that as a federally recognized Indian tribe, it could not be subjected to suit without the express consent of Congress. The Wipperts moved to strike this defense on the grounds that the Tribe had not raised it in its first response to the complaint, which was a motion to dismiss for failure to state a cause of action, filed on July 14, 1977 and denied for lack of a supporting brief.

The District Court, by order dated September 19, 1977, granted the Wipperts' motion to strike the Tribe's affirmative defense, stating that the defense was waived as provided in Rules 12(g) and 12(h), M.R.Civ.P., "with one exception, should counsel for the Blackfeet Tribe be able to show the court that immunity from suit is applicable herein and not waived, and therefore ought to be viewed as lack of jurisdiction over the subject matter rather than person, the defense will [be] and hereby remains available."

In November 1979, after a hearing on pre-trial motions, the District Court dismissed the title company's agent and ordered that the escrowed funds, which then amounted to $23,444, be placed in an interest-bearing money market certificate pending further order of the court. The court filed its findings of fact and conclusions of law on August 19, 1981.

In its 1981 memorandum, the District Court found that it had subject matter jurisdiction because the subject of the lawsuit was title to fee patent land; because it had jurisdiction to remove a cloud from title to such land; and because it had jurisdiction over the office of the Glacier County clerk and recorder, where the document purporting to create a lien against the land--the Tribe's tribal court judgment--had been filed.

The court also found that the "judgment record" filed by the Tribe in the Glacier County clerk and recorder's office was "invalid and void" as to the Wipperts and "expunged from this court's records," because it had not been reduced to judgment in the District Court. In general, the court determined, tribal court judgments are not entitled to full faith and credit in a state court because Article IV, Section 1 of the United States Constitution does not mention tribal court judgments. The court concluded, however, that if a state court were to rule that a tribal court judgment is invalid, it would "infringe on the right of reservation Indians to make their own laws and be guided by them;" that the State of Montana should give effect to a tribal court judgment as a matter of comity; and that the Blackfeet Tribe therefore had "a valid and enforceable judgment" and did not need a valid lien to reach the escrow account.

Accordingly, the court entered judgment for the Tribe on September 17, 1981, awarding the Tribe $16,630 plus interest from the date of the tribal court judgment, attorney's fees in the amount of $4,566, and $23 in costs out of the escrowed funds. By then, the amount originally due the Tribe as a deficiency judgment had been reduced by amounts the Tribe had withheld from income from the Wipperts' 120 acres of trust land. The Wipperts appealed.

We affirmed in part, holding that neither a sister state nor an Indian tribe could enforce a judgment in a Montana court without instituting an action in district court, pursuant to § 26-3-203, MCA, but that even though the Tribe had not instituted such an action, the tribal court judgment was entitled to deference as a matter of comity. We also affirmed the District Court's award of judgment from the escrow fund, holding that the Wipperts, in their escrow agreement, had agreed that the fund could be used to satisfy any remaining tribal court judgment. Wippert I, 654 P.2d at 515. Because the District Court had merely adopted the Tribe's statement of the amount due from the Wipperts, however, we remanded the case for a hearing to determine the proper amount of the judgment.

Wippert II

On March 23, 1983, the District Court heard testimony on the proper amount of the judgment. The Wipperts claimed that they owed the Tribe nothing because 128 bulls, cows, and calves should have been included in the sale but were unaccounted for, while the 220 animals that were sold would have produced a higher price if they had been sold in Great Falls rather than Shelby and in the fall rather than in the spring. The Wipperts also asserted that the Tribe had not complied with the notice requirements of § 30-9-504(3), MCA.

The District Court filed its findings of fact, conclusions of law, and judgment on March 28, 1984. It found that the Wipperts had presented no evidence showing that they did not owe the Tribe $17,172 at the time the Tribe filed its counterclaim, and that due to credit given for income from the Wipperts' trust land, only $14,330 was due and owing at the time of the March 24, 1983 hearing.

The court concluded in its 1984 judgment that the sale of the Wipperts' cattle was commercially reasonable, under § 30-9-507(2), MCA, because the reasonableness of a sale depends on the manner in which the sale is conducted, not the price received; that the steps taken by the Tribe to notify the Wipperts of the sale amounted to "actual notice" and met the requirements of § 30-9-504(3), MCA; and that it was authorized by §§ 30-9-504 and -511, MCA, to award reasonable attorney's fees.

The court therefore awarded the Tribe $14,331 plus interest from April 15, 1976, $13,465 in attorney's fees, and $23 in costs. On April 4, 1984, the court stayed execution pending the Wipperts' appeal.

We reversed, holding that the Tribe was required to provide reasonable notice of the sale of collateral and that under § 30-9-504(3), MCA, "reasonable notice" means at least five days' prior written notice of...