Foust v. Lujan

942 F.2d 712, 1991 WL 152463

Opinions

LOGAN, Circuit Judge.

Plaintiff Oliver Foust applied, pursuant to § 316 of the Federal Land Policy and Management Act (FLPMA), 43 U.S.C. § 1746, to correct an error in a land patent issued by the United States to Byron Smith, his predecessor in title. The Bureau of Land Management (BLM) approved Foust’s application, and intervenors-defendants the Northern Arapaho and Shoshone Indian Tribes (Indians) appealed. The Interior Board of Land Appeals (IBLA) reversed the BLM’s decision, and the district court upheld the reversal. Foust now appeals.

The land at issue is within Section 28, T. 6N., R. 6E., Wind River Meridian, Wyoming, which was part of a federal reserved water power site at the time the United States issued the patent to Smith. In 1929 and 1930, Smith filed homestead entry applications for the NE¼ASE¼ and lots 4 and 5. His applications were denied initially but then granted after he appealed. In 1935, Smith filed a final proof for his entries onto these three lots, listing his improvements as follows: a house, double garage and other buildings on the NE¼SE¼ a house, garage, and cellar on lot 4; and a fenced garden on lot 5. In 1936, the United States issued to Smith patents for the NE¼SE¼ and lots 4 and 5.

In 1942, the United States restored all undisposed land within Section 28, T. 6N., R. 6E., to the ownership of the Northern Arapaho and Shoshone Indian Tribes of the Wind River Reservation. In 1963, Smith’s widow conveyed the NE¼SE¼ and lots 4 and 5 to Foust by warranty deed. A 1979 resurvey of the area showed that the buildings that Smith had built and indicated as being on the NE¼SE¼ were, in actuality, located within the SW¼NE¼. Foust applied for a patent correction in 1982, ultimately proposing to deed back the NE¼SE¼ and lot 5 to the United States in exchange for roughly equal acreage on which the buildings are actually located. The Indians, who have title to the SW¼NE¼, filed an action in the district court to nullify the patents, which was dismissed without prejudice to enable the patent correction proceedings to continue.

Foust argues that because of the difficulty in surveying the mountainous terrain and ascertaining lot boundaries, both the United States and Smith believed that the land on which Smith built was within the boundaries of the lots conveyed by the patents. Foust contends that this mutual mistake of fact can be corrected under 43 U.S.C. § 1746. The IBLA and the district court rejected Foust’s arguments on several alternative grounds: 1) the land on which Smith built, SW¼NE¼, was not open to entry at the time the patents were issued and therefore cannot be subject to a patent correction under 43 U.S.C. § 1746; 2) Foust did not prove that a mistake of fact was made in granting him the NE¼SE¼ and lots 4 and 5; and 3) the equities of the case support a ruling for the Indians. See Shoshone and Arapahoe Tribes, 102 IBLA 256 (1988), I R. tab 1, Ex. B; Order Affirming Decision of the Interior Board of Land Appeals (D.Wyo. Nov. 13, 1989) (hereinafter “Order of Nov. 13, 1989”), I R. tab 33.

We review the IBLA’s decision to determine if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law,” or is “unsupported by substantial evidence....” 5 U.S.C. § 706(2)(A) & (E).

“Under the ‘arbitrary and capricious’ standard the scope of review is a narrow one. A reviewing court must ‘consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.’ ”

Bowman Transp. v. Arkansas-Best Freight Sys., 419 U.S. 281, 285, 95 S.Ct. 438, 442, 42 L.Ed.2d 447 (1974) (quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823-24, 28 L.Ed.2d 136 (1971)). Under the “substantial evidence” test, our inquiry is whether the agency’s decision is based on “ ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-17, 83 L.Ed. 126 (1938)). This is something more than a mere scintilla but something less than the weight of the evidence. Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971); Consolo, 383 U.S. at 620, 86 S.Ct. at 1026-27. “ ‘The substantiality of evidence must take into account whatever in the record fairly detracts from its weight.’ ” Bowman Transp., 419 U.S. at 284 n. 2, 95 S.Ct. at 441 n. 2 (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464-65, 95 L.Ed. 456 (1951)).

I

We consider first whether 43 U.S.C. § 1746 permits a patent correction involving an exchange of the SW¼NE¼ for other lots to which Foust has title. The statute provides:

“The Secretary [of Interior] may correct patents or documents of conveyance ... relating to the disposal of public lands where necessary in order to eliminate errors. In addition, the Secretary may make corrections of errors in any documents of conveyance which have heretofore been issued by the Federal Government to dispose of public lands.”

43 U.S.C. § 1746. The IBLA and the district court found that § 1746 does not allow what Foust proposes, because the SW¼NE¼ had been withdrawn from homestead entry for the purpose of a power reserve at the time the patents were issued. The district court acknowledged Foust’s argument that Congress amended FLPMA in 1976 to remove language requiring that patent corrections be based on the land’s availability for entry. Compare 43 U.S.C. § 697 (1964) with 43 U.S.C. § 1746 (1982). However, the court found the deletion of the entry language to be ambiguous and interpreted it to be “part of a concerted effort to simplify public land administration while retaining the basic precepts of public land law.” Order of Nov. 13, 1989, at 18. We disagree.

The meaning of the congressional amendment deleting the entry language is clear: the statute no longer requires the land’s availability for entry to correct a patent. We will not speculate as to what Congress might have intended, because no ambiguity exists. If Congress had intended something more subtle, it surely would have substituted language, rather than entirely deleting it. Furthermore, nothing in the legislative history supports the district court’s analysis of congressional intent. See id. at 17-18 (legislative history fails to show why the entry language was deleted). A finding that the Secretary of Interior (Secretary) cannot correct a patent to include lands that were not subject to entry by the original patentee is not in accordance with the law.

We are similarly unpersuaded by the Indians’ argument that the Secretary cannot correct a patent when doing so would require conveyance of tribal land. We agree that lands now held by the United States in trust for Indians are not public lands. See 43 U.S.C. § 1702(e). The relevant inquiry, however, is whether the lands in question were public lands at the time the patent was issued. The lot in question here, the SW¼NE¼, was owned by the United States, administered by the Secretary, and not held in trust for the Indians in 1936, and it therefore was public land under the statutory definition. See id.

We believe the Secretary’s fiduciary duty to the Indians does not prevent him from correcting a patent to land that was public at the time the patent was issued and the alleged mistake made. If the responsible officers of the United States believed that the land on which Smith had built and claimed was the land described in the patent, and that the United States had already conveyed that land, the Congress could not have intended to restore that same land to the Indians in 1942. Thus, the Indians took the land subject to any mistaken description resulting from boundary uncertainties. The fact that the Secretary is vested with responsibilities both to correct patent errors and to act as trustee for the Indians cannot operate against patentees who have Indians, rather than non-Indians, as neighbors. We hold that the SW¼NE¼ is subject to the patent correction mechanism of 43 U.S.C. § 1746.

II

The IBLA found, and the district court agreed, that Foust failed to prove that Smith’s patent contained an error. Our inquiry is limited to whether this determination is supported by substantial evidence, 5 U.S.C. § 706(2)(E), in light of the entire administrative record, see Bowman Transp., 419 U.S. at 284 n. 2, 95 S.Ct. at 441 n. 2; Roberts v. Morton, 549 F.2d 158, 160 (10th Cir.1976), cert. denied, 434 U.S. 834, 98 S.Ct. 121, 54 L.Ed.2d 95 (1977). Errors in patents are defined as:

“the inclusion of erroneous descriptions, terms, conditions, covenants, reservations, provisions and names or the omission of requisite descriptions, terms, conditions, covenants, reservations, provisions and names either in their entirety or in part, in a patent or document of conveyance as a result of factual error. This term is limited to mistakes of fact and not of law.”

43 C.F.R. § 1865.0-5(b). If both the United States and Smith intended that the land on which Smith built be conveyed to him but were mistaken about the boundaries or legal description, this would be a correctable mistake of fact.

Foust argues that the IBLA and district court ignored overwhelming evidence of this mutual mistake of fact. We agree. First, the topography of the area is such that ascertaining correct lot boundaries would have been difficult. Smith built in a small canyon among steep, rocky slopes and cliffs. It was not until 1979, when the area was resurveyed by modern surveying standards, that anyone was able to determine with certainty that the entry had been made on the SW¼NE¼, rather than the NE¼SE¼. Second, the SW¼NE¼ was the only place that was not too steep to build a house. This fact alone is not enough to convince us that the United States intended to convey the land on which Smith built, but it does raise questions about why Smith would have filed a homestead application, and why the United States would have issued a patent, for land that was too steep for a home.

Third, on several separate forms, Smith referred to the NE¼SE¼ but clearly described the SW¼NE¼. In his December 3, 1929, petition for designation of the NE¼SE¼ for stock-raising homestead entry, Smith described the lot as having “one small permanent spring,” IIA R. Petition for Designation Stock-raising Homestead Law; the spring is located on the SW¼NE¼. In the testimony of claimant form, filed August 30, 1935, for his final proof, he stated that he had built a house, double garage, and other buildings on the NE¼SE¼. His non-water reserve affidavit, filed December 3, 1929, and his application for reduction of the required area of cultivation, dated September 11, 1935, referred to a spring being located on the NE¼SE¼.

Witnesses also mistakenly assumed that the land on which Smith built was the NE¼SE¼. His final proof of homestead included the affidavits of two witnesses, who stated that Smith had built a dwelling and garage on the NE¼SE¼. One affiant had been familiar with the land for seven years and had visited the Smith home about twenty-five times; the other had been familiar with the land for twenty years and had visited the Smith home at least four times per year. Foust also presented with his application for patent correction the affidavit of Bonnie Bleak, who has lived near the land in question since Smith entered and built on it. She attested to her good faith belief that the improvements were on the lands described in the patents.

Finally, and most significantly, the responsible officials of the United States erroneously believed that Smith had built on the NE¼SE¼. Because of a protest against Smith’s entry, the General Land Office would not issue the patent until a special agent for the Department of Interior conducted a field investigation and determined that Smith had resided on the land he claimed he had entered. The special agent inspected the land and recommended granting Smith the patent to the NE¼SE¼ (as well as lots 4 and 5) because of his residence on the land. In his Favorable Report of November 18, 1935, the special agent described the NE¼SE¼ as “extremely rough and rocky, containing scattered scrub cedars not commercially valuable and two small springs sufficient for domestic use_ There is on the original entry [the NE¼SE¼ a stone and log house, double garage, storeroom, and frame bath house, having a reasonable value of $2,300.00.” IIA R. Favorable Report. The description matches the land that has since been discovered to be the SW¼NE¼. The United States would not have issued a patent for the NEViSEVi unless the officials responsible for investigating and issuing the patent were satisfied that Smith had entered the lot and was residing on it. Therefore, the United States erroneously described the lot that it intended to convey.

The IBLA and the district court found that Foust had not met his burden of proving a mutual mistake based on three sets of facts: (1) Smith’s description of the lands he sought as “rough,” “broken,” and “uneven”; (2) the lack of an adjoining boundary between the NE¼SE¼ and the SWVíNEVí; and (3) the location of the SW¼NE¼ within a powersite withdrawal and thus unavailable for entry. Nothing about the description of the land as rough, mountainous, uneven, and rocky is inconsistent with the mistake of fact that Foust alleges. The SWVíNEVí is apparently rough and rocky; just because it is less so than the NE¼SE¼ does not mean that Smith or the United States were describing anything other than the land on which Smith built. In fact, the Department of Interior’s special agent, at the time he investigated Smith’s entry, described the NEViSEVi as being “extremely rough and rocky” and as containing a house, double garage, and other improvements that were later discovered to be on the SW¼NE¼. IIA R. Favorable Report. Viewing Smith’s descriptions in context, it is apparent that he was concerned that he would be required to cultivate this rocky, uneven land in order to receive the patent. His failure to note that there was enough even ground to build a house cannot be fatal, especially when the special agent who inspected the land used similar descriptive terms.

The lack of a common boundary between the NE¼SE¼ and the SW¼NE¼ does raise a question about how the mistake could have been made. The two pieces of land touch only at one corner. The difficulty of surveying the area at the time because of the rough and steep topography could account for everyone’s mistaken belief that Smith had built on the NE¼SE¼. Regardless of the reason, the lack of an adjoining border cannot overcome the overwhelming evidence that both Smith and the United States referred to the NE¼SE¼ but described the SW¼NE¼. See Bowman Transp., 419 U.S. at 284 n. 2, 95 S.Ct. at 441 n. 2. (evidence in administrative record detracting from weight of evidence on which agency makes decision).

The availability of the SWANEVi for entry at the time is irrelevant. The United States believed that the land on which Smith had built was part of the NEVASE¹/), land available for homesteading. The fact that the United States might not have conveyed this land if it had known its true description does not mean that the United States did not make a correctable mistake. The record shows that the United States intended to convey the land that Smith entered and improved. Accordingly, the IBLA’s determination was not based on substantial evidence.

Ill

“Once the fact of error in the patent is established, the other circumstances of the case must be examined to determine whether considerations of equity and justice warrant amendment of the patent.” Ben R. Williams, 57 IBLA 8, 13 (1981). The IBLA found that Foust was not entitled to relief as a matter of equity, because he failed to survey the land at the time he purchased the property and because the Bureau of Indian .Affairs (BIA) opposed the patent correction as detrimental to the Indians’ interests. The district court affirmed on the same grounds. We review under the “arbitrary and capricious” standard. 5 U.S.C. § 706(2)(A).

Foust presents several equitable considerations in his favor. He is elderly, widowed, and living on the land in question. He has lived there for twenty-eight years, paid the taxes, maintained the property, and made further improvements. He would suffer severe economic hardship if he were to lose his home.

Foust asserts that he made a title search before purchasing the property but admits that he did not have the property surveyed. However, there is no apparent reason why he should have been on notice that the property required a survey. The original entryman Smith and his wife, who sold the land to Foust in 1963, believed that the lot with the house, other improvements, and stream was the NEVíSEVí. So did the government and nearby residents. In fact, no one suspected the mistake until 1969, and the mistake could not be confirmed until an extensive resurvey in 1979.

Foust was a good faith purchaser, apparently paying full value for the land. Although he could have been more diligent by having the land surveyed, under the circumstances we do not believe he should lose the land just because he relied on the representations of the one who conveyed to him and on the other information that he did obtain. It is too much to expect every purchaser to resurvey on the chance that a patent issued decades before might have misdescribed the land.

The BIA’s opposition to the patent correction, while a relevant consideration, is also insufficient under the circumstances to prevent the correction. The correction would involve an exchange of land roughly equal in acreage, thus not diminishing the overall number of acres in the Wind River Reservation. Although the SWVíNEVí quite likely is more valuable than the land the Indians would receive in return, the Indians have presented no evidence of a difference in land values or of any other harm. A win for the Indians would appear to be a windfall to the extent of the excess value of the improvements. Furthermore, the Indians took no action with respect to the land until the early 1980s, some fifty years after Smith entered the land and nearly forty years after the remaining un-disposed land in the area was conveyed to them. Although adverse possession does not run against the Indians, their failure to take some action against the alleged trespass for nearly forty years is a relevant consideration in evaluating the equities of the case. If they did not know that Smith had built on land for which he did not have a patent, this would strongly suggest that they were under the same mistaken assumptions about lot boundaries that were held by the United States, Smith, Foust, and the other area residents. On the other hand, if they did know of the mistake but did nothing about it, they did not value the SWViNEVi highly enough to protect their property rights; they cannot assert now that the land is so valuable that an exchange would prejudice their interests.

Because of the severe hardship that Foust would face if he were to lose his home and the insufficiency of the factors on which the IBLA relied, we hold that the IBLA made a clear error of judgment in finding that Foust was not entitled to relief as a matter of equity. The determination was arbitrary and capricious. See Bowman Transp., 419 U.S. at 285, 95 S.Ct. at 441-42.

REVERSED.

Footnotes

1

. Aside from the trespass question, the significance of this discovery lies in the fact that at the time Smith built his home and other improvements, the area now designated as lot 11 was still reserved as a powersite and had not been restored to entry.