Wells Fargo Bank v. Apache Tribe of Oklahoma

2016 OK CIV APP 16, 369 P.3d 56, 2015 Okla. Civ. App. LEXIS 119, 2015 WL 10550930
CourtCourt of Civil Appeals of Oklahoma
DecidedAugust 28, 2015
DocketNo. 112,765
StatusPublished

This text of 2016 OK CIV APP 16 (Wells Fargo Bank v. Apache Tribe of Oklahoma) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells Fargo Bank v. Apache Tribe of Oklahoma, 2016 OK CIV APP 16, 369 P.3d 56, 2015 Okla. Civ. App. LEXIS 119, 2015 WL 10550930 (Okla. Ct. App. 2015).

Opinion

BRIAN JACK GOREE, Presiding Judge.

{1 In this appeal the Apache Tribe of Oklahoma argues that its limited waiver of sovereign immunity in its agreement with Wells Fargo Bank does. not allow Bank to seize general tribal assets to satisfy its judgment against Tribe. It argues the trial court erred in confirming the arbitrator's award holding that Bank may seize such assets. [57]*57We affirm the trial court's decision confirming the arbitrator's award.

2 This is the second appeal in thls matter (Oklahoma County District Court case no: CJ-2011-8545) from orders confirming arbitration awards. In June 2008, the Apache Tribe of Oklahoma (Tribe) and Wells Fargo, National Association (Bank) entered into a loan agreement (agreement) wherein Bank loaned Tribe $4,865,000,00, The agreement contains a waiver of sovereign immunity and provides for arbitration of disputes.

T3 In 2010, Tribe stopped paying on the loan, and Bank initiated arbitration proceedings. The arbitrator determined that Tribe's business committee had the authority to waive sovereign immunity on behalf of Tribe and awarded a judgment to Bank in the amount of $2,751,160,00. On November 15, 2011, the trial court entered a judgment confirming the award.

14 Tribe appealed the judgment (the first appeal) along with subsequent orders issued in aid of Bank's effort to collect its judgment. In Wells Fargo Bank v. Apache Tribe of Oklahoma, 2015 OK CIV APP 10, 360 P.3d 1243, (Apache Tribe ), the Court of Civil Appeals affirmed the judgment and the subse" quent orders, holding that the agreement contains a clear and express limited waiver of Tribe's sovereign immunity, a consent to arbitrate disputes, and an agreement that any arbitration award can be reduced to judgment and enforced in the courts of Okla homa. It held that the arbitrator. did not exeeed his authority in awarding Bank the unpaid balance of its loan. It affirmed the trial court judgment confirming the arbitrator's decision, "except to the extent that the Judgment confirms the arbitrator's decision that the Loan Agreement contains 'a valid waiver of the Tribe's sovereign immunity. That portion of the Judgment is reversed." 1

15 Undertaking further efforts to collect its judgment, Bank commenced a new arbitration to determine the scope of its recovery of its judgment against Tribe.2 Specifically, Bank asked the arbitrator to declare that the post-default transfers from the casinos to Tribe are "Distributions" not permitted .by the agreement. It also sought a declaration that the agreement definition of "Enterprise Property" allows it to collect its judgment from Tribe's general, nonexempt cash assets up to the amount of Tribe's unauthorized distributions.

1 6 On July 20, 2012, in its Order Granting Wells Fargo's Partial Dispositive Motion, the arbitrator held that between October 2010 and the date of the arbitration, the casinos made unpermitted distributions in the amount of $1,562,131.00. This amount included payments the casino made to the original casino developer, and payments the casino made for the salaries and expenses of the Apache Gaming Commission and the Apache Gaming Board. The arbitrator issued an award that allowed Bank to satisfy up to $1,567,981.00 of the judgment from Tribe's general cash assets. It held that the agreement "permits [Bank] to follow the distributions and recover the full amount of improper Distributions from any cash asset of the Tribe other than those assets that are statutorily exempt." He wrote, "[iln affect [sic], the general assets of the Tribe have become enterprise property to the extent of the unauthorized distributions." He also wrote, "[the definition is very clear, Any transfer or distribution after default retains its character as Enterprise Property. This is a normal and necessary requirement to insure that the Casino (the Enterprise) doesn't dissipate its assets to [Bank’s] detriment after default."

T7 The arbitrator held that unauthorized distributions do not lose their character as Enterprise Property just because Tribe treats them as general assets and spends accordingly. He explained:

[58]*58The Tribe has merged and mixed the received distribution with its general assets and balance sheet by directing the funds be used to pay ifs general debts. The undersigned cannot find that it was the intent of the parties that the casino be able to distribute and dissipate its assets insulating substantial Casino assets from execution by Wells Fargo. The loan agreement clearly intended that any distribution retain its character as enterprise assets subject to execution by Wells Fargo. © It could not be the intent of the parties that the Tribe be able to thwart that right of execution by simply changing the form of the distribution such that it becomes a part of the Tribe's general assets, The only way to give effect to the parties' original intent is to allow execution against those general assets into which the distribution was merged. '

T8 The arbitrator explained that a contrary holding would violate a canon of contract construction: if Tribe could shield an unauthorized Distribution from collection by spending the specific dollars so there is nothing left upon which to execute, "it would render parts of the contract unenforceable with no purpose or affect." He concluded, "Itlhe terms of the Loan Agreement allow [Bank] to collect on the underlying loan in the Event of Default, and the Tribe cannot evade that real-world objective by shifting funds while retaining assets that could be used to satisfy the Judgment." On April 28, 2018, in its Order Granting Wells Fargo's Dispositive Motion After Submission of Evi-dentiary Materials, the arbitrator reaffirmed his previous legal conclusions. ~

19 On July 29, 2018, in the Oklahoma County District Court, the Tribe filed The Apache Tribe of Oklahoma's Application and Motion 'to Vacate Arbitration Award, and Brief in Support; It argued that the arbitrator exceeded his powers and jurisdiction by not interpreting the definition of "Enterprise Property," but by rewriting the agreement to add a provision to it-that if the casinos make distributions not permitted under the agreement, Bank can collect its judgment against general tribal assets such as oil and gas tax revenues, car tag revenues, and fed-éral and state funds. Tribe argued that the limited waiver of sovereign immunity in the agreement does not permit Bank to recover its judgment against such general tribal assets. Its contention is that Bank is limited to Enterprise Property-assets of the casino. Even if there were "unpermitted Distributions," the agreement does not allow Bank to reach general assets of Tribe to satisfy its judgment.

{10 On March 19, 2014, the trial court filed its Order Denying the Apache Tribe of Oklahoma's Application and: Motion to Vacate Arbitration Award and Order Confirming Arbitration Award (the Order).

{11 In the Order, the trial court stated it had reviewed Apacke Tribe. It found it had jurisdiction to confirm the arbitration award and that review of the award is governed by the Federal Arbitration Act (FAA).

T 12 The trial court noted that in Apache Tribe, the Court of Civil Appeals held it was for the trial court, not the arbitrator to determine whether Tribe waived its sovereign immunity as to the agreement,. Accordingly, the trial court found and held that the agreement waived Tribe's sovereign immunity.3

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First Options of Chicago, Inc. v. Kaplan
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Wells Fargo Bank, National Ass'n v. Apache Tribe of Oklahoma
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Bluebook (online)
2016 OK CIV APP 16, 369 P.3d 56, 2015 Okla. Civ. App. LEXIS 119, 2015 WL 10550930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-fargo-bank-v-apache-tribe-of-oklahoma-oklacivapp-2015.