Aircraft Equipment Co. v. Kiowa Tribe of Oklahoma

1996 OK 81, 921 P.2d 359, 67 O.B.A.J. 2302, 1996 Okla. LEXIS 94, 1996 WL 394018
Supreme Court of Oklahoma·Decided July 16, 1996·No. 82505·Published·Cited by 21 cases

Opinions

ALMA WILSON, Chief Justice:

The appellee, Aircraft Equipment Company, sued for breach of an assumption agreement in which the appellant, The Kiowa Tribe of OHahoma, had agreed to assume the indebtedness of the appellee on a note. The tribe filed a motion to dismiss, which was denied by the district court. The appellee filed a motion for summary judgment, which was granted by the district court. The tribe appealed and the Court of Appeals affirmed the judgment of the district court. We have previously granted certiorari. We vacate the opinion of the Court of Appeals, affirm the judgment of the trial court and grant the motion for appeal-related attorneys’ fees with instructions to the trial court to determine the amount due.

The sole issue is whether the tribe is subject to a money damage suit for claims arising from commercial activity outside of Indian country.1 The appellee is the maker of a note payable to Carl E. Gungoll Exploration Joint Venture. In order to purchase all assets owned by the appellee, the tribe agreed to assume the appellee’s obligation on a note in the sum of $200,000.00, and upon which $180,000.00 was still due. The tribe failed to make the payments agreed upon, and the appellee made the payments instead. The appellee then sued, and the tribe defended asserting its sovereign immunity.

The Appellant’s Suggestion of Additional Authorities recognizes that Hoover v. Kiowa Tribe of Oklahoma, 909 P.2d 59 (Okla.1995), cert. denied — U.S. -, 116 S.Ct. 1675, 134 L.Ed.2d 779 (1996), is controlling over the single issue raised in the tribe’s petition for certiorari. In that case we held “that a contract between an Indian tribe and a non-Indian is enforceable in state court when the contract is executed outside of Indian Country.” Hoover, 909 P.2d at 62. We found it [361] to be settled law “that absent express federal law to the contrary, state courts have jurisdiction over the merits of a tribal immunity defense to claims arising under state laws,” and “that state laws may be applied to Indians _” Hoover, 909 P.2d at 61.

In Hoover, we quoted Lewis v. Sac and Fox Tribe of Oklahoma Housing Authority, 896 P.2d 503, 508 (Okla.1994), cert. denied, — U.S. -, 116 S.Ct. 476, 138 L.Ed.2d 405 (1995): “[Wjhenever Indian interests are tendered in a controversy, a state court must make a preliminary inquiry into the nature of the rights sought to be settled. Only that litigation which is explicitly withdrawn by Congress or that which infringes upon tribal self-government stands outside the boundaries of permissible state-court cognizance.” (Footnote omitted.) Hoover, 909 P.2d at 62.

Our recent ease of First National Bank in Altus v. Kiowa, Comanche and Apache Intertribal Land Use Committee, 913 P.2d 299 (Okla.1996), cites Hoover as dispositive of that ease as well. In the Altus case the Kiowa, Comanche and Apache tribes formed the Intertribal Land Use Committee vested with the authority of their particular tribal general councils to enter on their behalf into leases, permits, easements, and other transactions. The bank in Altus loaned money to the Intertribal Committee for use in their dressmaking operation in Altus. The Inter-tribal Committee defaulted on the loans and the bank sued. The Intertribal Committee filed a motion to dismiss for lack of jurisdiction based upon tribal sovereign immunity, and the trial court dismissed. The bank appealed. This Court reversed and remanded after holding Hoover to be dispositive. In referring to the reasoning in Hoover, the Altus case observed that state laws may be applied to Indians, even on reservations unless such application would interfere with reservation self-government or impair a right granted or reserved by federal law, and that state authority over Indians is even more extensive over activities not on any reservation. Altus, 913 P.2d at 300-301, citing Organized Village of Kake v. Egan, 369 U.S. 60, 82 S.Ct. 562, 7 L.Ed.2d 573 (1962).2

The tribe asserts that Hoover is based upon Padilla v. Pueblo of Acoma, 107 N.M. 174, 754 P.2d 845 (N.M.1988), and that the New Mexico courts have found that case to be flawed, citing DeFeo v. Ski Apache Resort, 120 N.M. 640, 904 P.2d 1065 (N.M.Ct.App.1995), cert. denied 120 N.M. 533, 903 P.2d 844 (1995). The Padilla case held that the district courts of New Mexico may exercise jurisdiction over an Indian tribe when the tribe is engaged in activity off the reservation. DeFeo distinguished its facts from Padilla, specifically noting that the activity in question in DeFeo involved activity on the reservation. Nevertheless, the New Mexico Court of Appeals observed that Padilla appears to conflict with the Tenth Circuit’s more recent holding in Sac & Fox Nation v. Hanson, 47 F.3d 1061 (10th Cir.1995), a case where the Tenth Circuit affirmed a federal district court decision to enter a permanent injunction prohibiting an Oklahoma district court from holding proceedings involving the Sac & Fox Nation. The New Mexico Court of Appeals quoted four paragraphs from the Tenth Circuit opinion, concluding that the Tenth Circuit clearly stated that the location of the commercial activity was not determinative and that the federal court had held that an Indian tribe was immune from suit in state courts even though the suit resulted from commercial activity off the Indian tribe’s reservation. DeFeo, 904 P.2d at 1069.

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Aircraft Equipment Co. v. Kiowa Tribe of Oklahoma, 1996 OK 81, 921 P.2d 359, 67 O.B.A.J. 2302, 1996 Okla. LEXIS 94, 1996 WL 394018 (Okla. 1996).

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