Rosebud Sioux Tribe v. Colombe

2016 SD 62, 885 N.W.2d 350, 2016 S.D. LEXIS 102, 2016 WL 4567151
CourtSouth Dakota Supreme Court
DecidedAugust 31, 2016
Docket27587
StatusPublished

This text of 2016 SD 62 (Rosebud Sioux Tribe v. Colombe) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rosebud Sioux Tribe v. Colombe, 2016 SD 62, 885 N.W.2d 350, 2016 S.D. LEXIS 102, 2016 WL 4567151 (S.D. 2016).

Opinion

KERN, Justice.

[¶ 1.] An estate appealed from a circuit court’s decision to grant comity to a Rosebud Sioux Tribal Court order. The order pierced a business’s corporate veil and held decedent personally liable for a judgment in favor of the Rosebud Sioux Tribe. We affirm.

BACKGROUND

[¶ 2.] Charles Colombe, a member of the Rosebud Sioux Tribe (RST) died on June 9, 2018. His son, Wesley Colombe, filed a petition for informal probate in Todd County, Sixth Judicial Circuit, and was appointed as personal representative of Charles’s estate (the Estate). In February 2014, Wesley provided written notice to creditors. The RST filed a notice of creditor’s claim, seeking to enforce an April 19, 2012 Rosebud Sioux Tribal Court (tribal court) order and judgment for $527,146.76. In response, Wesley filed a notice of disallowance of claim, asserting the RST could not show that the order was entitled to .comity by satisfying the requirements of SDCL 1-1-25. The circuit court granted comity to the tribal court order and judgment. Wesley, on behalf of the Estate, appeals.

[¶ 3.] The April 19, 2012 tribal court judgment was the culmination of more than a decade of steady litigation between RST and BBC Entertainment Inc. (BBC). Aspects of this case have been reviewed by the tribal court, the Rosebud Sioux Tribe Supreme Court (RST Supreme Court), the federal district court, and the Eighth Circuit Court of Appeals. A truncated history of the litigation is necessary to provide context for the parties’ arguments.

[¶ 4.] The Indian Gaming and Regulatory Act of 1988 (IGRA) authorized creation and subsequent regulation of gaming by Indian tribes. 25 U.S.C. §§ 2701-2721 (2012). IGRA established the National Indian Gaming Commission (NIGC) to provide oversight of Indian gaming. Under IGRA, tribes are authorized to build casinos and enter into management contracts. However, the Chairman of the NIGC must approve all contracts and modifications. In 1994, RST entered into a five-year contract with BBC to build and manage a Class III gaming casino on the Rosebud Reservation. Wayne Boyd and Charles were the shareholders of BBC, with Charles being the primary shareholder and general manager of the casino.

[¶5.] The agreement provided for a management fee of 35% of the net gaming revenue of the casino for a period of five years. The contract required BBC to deposit initial operating capital in an Operating Expense Reserve (OER) account. BBC failed to do so. RST and BBC later orally agreed that instead of the required deposit, BBC would contribute 7.5% of the casino’s monthly net profits to the account. This modification was not presented to the Chairman of the NIGC for approval. Pri- or to the expiration of the contract in August 1999, BBC withdrew $415,857 from the OER account under the theory that they were entitled to this sum as part of their contractual share of the net profits.

[¶ 6.] In August 2001, RST sued BBC in tribal court for breach of contract, alleging that the oral modification was invalid as the Chairman of the NIGC did not approve it. Additionally, RST argued that BBC was not entitled to any share of the OER account because BBC did not fund the OER as required by the contract. In January 2004, the case was tried before *353 Judge B.J. Jones 1 who ruled in favor of BBC. RST appealed to the RST Supreme Court who reversed Judge Jones’s finding for BBC. The RST Supreme Court determined that the oral modification to the management agreement was invalid as it was not approved by NIGC. The RST Supreme Court remanded the matter to the tribal court for a hearing to determine damages.

[¶ 7.] RST filed a motion for rehearing en banc, arguing in part that no hearing was necessary as RST was entitled to the full amount withdrawn by BBC. The RST Supreme Court granted the request, but limited the en banc hearing solely to the proper measure of damages. On October 2, 2006, the RST Supreme Court affirmed its prior ruling and remanded the case to the tribal court for a detailed accounting. The Court clarified that it found invalid only the portion of the management contract that changed the funding mechanism for the OER account. On remand, BBC was not foreclosed from presenting its potential claims for unjust enrichment under the contract.

[¶ 8.] On October 16, 2007, Judge Jones entered judgment against BBC for $399,353.61 plus accrued interest of $127,793.15, a total of $527,146.76. BBC moved for a new trial and its request was denied. BBC did not appeal the judgment to the RST Supreme Court. As BBC was insolvent, it did not pay any part of the judgment.

[¶ 9.] In February 2009, RST filed a complaint in tribal court against Charles, Boyd, and BBC. RST sought to pierce BBC’s corporate veil and hold Charles and Boyd 2 personally liable for the judgment. In March 2009, Charles moved to dismiss the lawsuit. He argued RST failed to comply with a 2007 amendment to the Constitution of the Rosebud Sioux Tribe (RST Constitution), 3 depriving the tribal court of jurisdiction. In April 2010, Chief Judge Sherman Marshall, who presided over the lawsuit, denied Charles’s motion to dismiss. In response, Charles sought permission to bring a discretionary interlocutory appeal. Chief Judge Marshall denied this request and ordered Charles to comply with written discovery requests by January 22,2011.

[¶ 10.] Instead, Charles filed a lawsuit in federal court naming Chief Judge Marshall, the tribal court, and RST as defendants. Colombe v. Rosebud Sioux Tribe, No. CIV 11-3002-RAL, 2011 WL 3654412 (D.S.D. Aug. 17, 2011). Charles sought three things: (1) to vacate Judge Jones’s October 16, 2007 judgment on the basis that the tribal court lacked jurisdiction to find the oral modifications to thé contract void. He also argued that the IGRA did not provide for private action by RST; (2) a judgment on the merits finding that BBC did not violate the contract; and (3) an injunction preventing RST from pursuing any litigation against him relating to Judge Jones’s October 16, 2007 judgment.

[¶ 11.] In light of the federal lawsuit, Chief Judge Marshall and the tribal court’s associate judges recused themselves from the tribal court lawsuit seeking to pierce BBC’s corporate veil. On No *354 vember 7, 2011, Chief Judge Marshall appointed Patricia Meyers as a special judge to handle the case. During the prior proceedings, Charles had failed to answer requests for discovery and comply with the tribal court’s discovery orders. RST filed a motion for summary judgment and a hearing'was scheduled for March 13, 2012. At the beginning of the hearing Charles’s lay advocate, Oliver Seamans, orally moved for the recusal of Judge Meyers. Seamans argued he had not received notice of her appointment. Judge Meyers denied the request finding that the motion failed to comply with the requirements of tribal law. Judge Meyers proceeded with the hearing and took the matter under advisement.

[¶ 12.]' On April 19, 2012, Judge Meyers entered an order granting RST summary judgment.

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Bluebook (online)
2016 SD 62, 885 N.W.2d 350, 2016 S.D. LEXIS 102, 2016 WL 4567151, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rosebud-sioux-tribe-v-colombe-sd-2016.