Brown v. United States

32 Fed. Cl. 509, 1994 U.S. Claims LEXIS 231, 1994 WL 715220
United States Court of Federal Claims·Decided December 28, 1994·No. No. 91-898L·Published·Cited by 6 cases

Opinion

OPINION

REGINALD W. GIBSON, Judge:

INTRODUCTION

This matter comes before the United States Court of Federal Claims on defendant’s Motion to Dismiss or in the Alternative for Summary Judgment, as well as Plaintiffs’ Cross-Motion for Partial Summary Judgment. Plaintiffs, certain Indian owners of allotted land on the Salt River Reservation, seek money damages from the United States for breach of a fiduciary duty based on an alleged trust relationship between them and the government arguably stemming from authority implicit in 25 U.S.C. § 415(a) and related regulations 25 C.F.R. Part 162. Conversely, defendant’s motion for summary judgment challenges the threshold jurisdiction of this court to even hear plaintiffs’ claim. The thrust of defendant’s argument is that plaintiffs’ claim does not rest upon any money-mandating provision of law or a contract with the United States as required under the Tucker Act, 28 U.S.C. § 1491. Defendant also moves to dismiss the complaint for lack of subject matter jurisdiction (RCFC 12(b)(1)), asserting that it is barred by the six-year statute of limitations contained in 28 U.S.C. § 2501 (1988),1 [511]*511and for failure to join a necessary and indispensable party (RCFC 19). Because we conclude that plaintiffs’ fail to point to any source of statutory law or regulations which can be fairly interpreted as mandating compensation, we find that jurisdiction over this matter pursuant to 28 U.S.C. § 1491 is wanting. Accordingly, defendant’s Motion for Summary Judgment2 must be granted.

FACTS

The 14 named plaintiffs at bar are Indians, members of the Salt River Pima-Maricopa Indian Community near Phoenix, Arizona. Most of the irrigated land in the reservation was divided into 10 acre parcels and allotted to individual Tribe members pursuant to the General Allotment Act, 25 U.S.C. § 331 et seq. (1988). Many of these allottees have sought to lease their land for commercial purposes pursuant to 25 U.S.C. § 415 (1988).3 Thus, on June 1, 1964, plaintiffs (or their predecessors in interest), along with other allottees, as lessors, entered into a lease with Stovers, Inc., a Nebraska corporation, as lessee. The collective 160-acre property was leased to Stovers for 25 years for the purpose of operating a golf course, presently named Pima Country Club.

The lease,,known as “Lease B-45,” provided that the lessee would pay lessors a ground rental in quarterly installments in addition to quarterly payments equal to a percentage of the gross receipts from business conducted on the premises, including greens fees, membership fees, cart rentals, driving range fees, and pro shop sales. The lease called for quarterly payments of two percent (2%) of gross receipts starting July 1,1966, and four percent (4%) of gross receipts beginning July 1, 1968. To ensure that lessors received the payments due, the lease provided that a certified public accountant licensed in Arizona, appointed by the lessee, would submit to lessors and the Secretary of the Interior a certified quarterly statement of gross receipts.

On September 21,1971, after several years of apparently smooth lease operations, attorneys for York State Bank informed the Bureau of Indian Affairs, Salt River Agency (“the BIA”), that lessee’s mortgage on the lease was in default for failure to make interest payments. As a consequence of this event, the Agency and Virgil Brown, spokesman for the lessors,4 agreed that the matter required the diligent attention of lessors in their effort to achieve a fair return on the property. However, no evidence suggests that any action was taken, at that time, by plaintiffs or the BIA.

Less than a year later, on March 8, 1972, Knutson Companies, Inc. acquired the golf resort. Shortly thereafter, Knutson, as the new owner, submitted a proposal to the BIA to extend the lease term, among other things. Discussions over the proposed lease amendments continued for several years with no resolution. In 1975, at the Tribe’s request, the BIA began contracting its Realty Management Program, in addition to other services, to the Tribe. Under these contracts,5 the Tribe was responsible for managing and administering leases on the reservation.

In 1979, after the golf resort was renamed “Pima Inn and Golf Resort, Inc.” (“Pima Inn”) and Lawrence G. Malanfant, a new investor, began to acquire a controlling inter[512]*512est in the property, Brown sought advice and assistance. On September 16, 1979, on behalf of the lessors, Brown signed a limited power of attorney with Warren “Smitty” Smith. While the extent of Smith’s duties remains unclear, the limited power of attorney authorized him to appoint an accountant to conduct an audit. During this active period in the lease, Malanfant, who had been designated a director of the newly-named Pima Inn,6 requested, on July 20, 1979, in addition to an extension on the lease, permission to make specific improvements to the resort property as well the right to assign the property’s interest to a bank or institutional lender in case of default.

Approximately two months later, in connection with the ongoing negotiations, Brown requested that Pima Inn deliver to plaintiffs certified financial statements of gross receipts for 1977 and 1978, as required under the lease. Pima Inn, through a letter by its counsel, agreed to comply with Brown’s request “in a good faith effort to maintain an amiable working relationship with the lessors.”

Negotiations regarding modified lease terms continued over the next six years. In October and November of 1986, plaintiffs, via Brown, wrote to the BIA requesting copies of current certified accounting statements. After obtaining such financial statements from the lessee, the BIA sent copies to the lessors. Upon evaluating the financial report, and concluding that it was insufficient, Brown, on May 13, 1987, authorized Robert O. Rose, a certified public accountant, to conduct an audit.

Rose performed the audit and concluded in his report on May 29, 1987, that lessee, now known as Pima Country Club, Inc., had not disclosed the full extent of its gross receipts generated from membership fees and dues. Rather, he alleged, the lessee had discounted these amounts by 40%, and reported only 60% to the lessors. Rose’s audit stated that the gross receipts, under the lease, should have included 100% of the membership fees and dues. Brown communicated the results of the audit to the BIA in a December 10, 1987 letter.

Over the next several years, the BIA, the Tribe, and the lessors collectively launched an investigation into the administration of the lease. The BIA ultimately concluded on May 15, 1990, that, as a result of it breaches of the lease agreement, lessee was precluded from exercising its option to renew the lease.

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Brown v. United States, 32 Fed. Cl. 509, 1994 U.S. Claims LEXIS 231, 1994 WL 715220 (uscfc 1994).

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