Craig Thorstenson, Plaintiff-Appellant, v. Gale A. Norton, Secretary, United States Department of the Interior; Bureau of Indian Affairs, United States Department of the Interior; Defendants-Appellees, Russell J. McClure; Cheyenne River Sioux Tribe, Defendants.
No. 04-4029
United States Court of Appeals, Eighth Circuit
Submitted: September 14, 2005; Filed: February 28, 2006
Before MELLOY, BEAM, and BENTON, Circuit Judges.
I. BACKGROUND
This case dates back to 1971 and involves nearly every legal venue conceivable. The fighting issue revolves around a tract of South Dakota tribal land held in trust by the United States government. Thorstenson claims an interest in money paid by Thorstenson‘s predecessors for the purchase of the trust land, which money was never refunded by the proposed sellers when the conveyance was not completed. The following recitation of facts outlines the litigation involved in this dispute.
A. 1971 Land Contracts
Around 1971, Grover Cudmore, an Indian, and his non-Indian wife, Virginia, executed various contracts for deed with Thorstenson‘s father and uncle (Thorstenson‘s predecessors-in-interest) for the sale of certain tracts of land owned by the Cudmores, including 1,120 acres held in trust by the United States. To convey trust land,
B. Escrow Agreement
In 1986,2 the parties entered into an escrow agreement, in which the Cudmores agreed to transfer the trust property or deposit $37,056.14 (the amount which the Cudmores had already been paid for the as yet unconveyed trust land) into an escrow account. Further, the Cudmores agreed to return Thorstenson‘s payments attributed to the trust land in the event that conveyance of the trust land was not ultimately approved by the Secretary. Thorstenson agreed to deposit, and did deposit $4,311.28, which represented the final payment due on one of the earlier contracts. However, the Cudmores did not transfer the trust land, failed to deposit their agreed-upon amount into the escrow account, and forbade the bank handling the escrow from returning the money in the account to Thorstenson.
C. Tribal Court Proceedings
In 1987, Thorstenson sued Grover Cudmore in tribal court (Virginia, a non-Indian, was not part of this suit) for fraud and breach of contract over the land sale. Grover counterclaimed. After the evidence was presented to the jury, but prior to the case being submitted to the jury for determination, Thorstenson withdrew his contract claim. Apparently the parties had some difficulty settling on jury instructions with the court. The terms of the withdrawal, based on discussions conducted in the judge‘s chambers, were not recorded. The jury found for Grover on the fraud claim and in favor of Thorstenson on the counterclaim (both parties lost) and awarded no damages. When Thorstenson later tried to renew his contract action, based upon his
D. State Court Proceedings Against Virginia Cudmore
Grover died in February 1997 and Virginia tentatively received a life estate in the trust property under the terms of Grover‘s Bureau of Indian Affairs (BIA)-approved will. After Grover‘s death, Thorstenson sued Virginia in state court for breach of contract. The state court rejected Virginia‘s res judicata defense based on the tribal court proceedings and entered judgment for Thorstenson in 1999 on his contract claim. Thorstenson attempted to enforce the judgment against Virginia but she filed for bankruptcy relief some time between 2000 and 2001.
E. Virginia Cudmore‘s Bankruptcy Proceedings
Thorstenson was the sole unsecured creditor in Virginia‘s bankruptcy proceedings. The Chapter 13 Plan provided generally that Thorstenson would have the beneficial use of Virginia‘s life estate, without paying rent or only minimal rent for the use of the land. This beneficial use was to be governed by a “written BIA lease,” which was subject to approval by the BIA and subject to other applicable federal rules. The BIA was present and participated in the bankruptcy proceedings. It agreed to Virginia‘s proposal regarding her life estate, insisting upon lease language saying that Thorstenson would comply with the same lease provisions as other tenants who were leasing allotted Indian lands, specifically the requirement that BIA approval was required for Virginia to execute a lease. At the time of these proceedings Thorstenson had possession of the trust lands as a tenant.
Even though the BIA agreed to Virginia‘s bankruptcy plan, it took the position that Virginia did not yet have a life tenancy nor the authority to agree to the use of the land during her life tenancy because Grover‘s probate proceedings were not yet finalized. The BIA contended that it still held the entire property as trustee. In that role, “as with all open probate matters,” the BIA was required to obtain the fair annual rental value for Indian land on behalf of the undetermined heirs and devisees of the deceased Indian owner.
Not wanting to vacate the property, Thorstenson unsuccessfully sought enforcement of the Chapter 13 Plan. At the same time, the BIA threatened penalties if Thorstenson did not remove himself from the property. Thorstenson‘s attempt to appeal the BIA‘s actions was rejected by the Office of Hearings and Appeals and the Interior Board of Indian Appeals as a purportedly non-appealable matter.
G. Tribal Probate Proceedings
As earlier indicated, the trust land at issue became part of Grover‘s probate estate following his death. Virginia was Grover‘s personal representative. Thorstenson filed a claim in the probate proceeding for reimbursement of the overpayments for lands not delivered under the contracts for deed. Thorstenson used his state court judgment against Virginia to support his claim. A hearing on Grover‘s estate was held on June 18, 1998. The Administrative Law Judge (ALJ) reviewed the state and tribal court proceedings as well as the contracts and escrow agreement and denied Thorstenson‘s claim in August 2001. In doing so, the ALJ gave full faith and
Thorstenson appealed the denial of his request for rehearing to the Interior Board of Indian Appeals (Board). In June 2003, the Board affirmed the denial of the claim with modifications. The Board held that “[t]o the extent either [the tribal court or the state court] judgment purported to affect . . . title to trust land, both courts lacked subject matter jurisdiction because Federal law governs any transaction concerning the sale and conveyance of Indian trust lands,” citing
Thorstenson appealed the Board‘s ruling to the district court. Before the district court and in his briefs on appeal to this panel, Thorstenson argued that 1) the Board erred in failing to find the state court judgment against Virginia binding against Grover‘s estate, 2) the Board erred in stating that the parties attempted to convey property without approval, and 3) because the contracts were conditioned upon the application of approval from the BIA, they are valid regardless of whether the approval was sought or granted.
II. DISCUSSION
A. Standard of Review
When reviewing agency actions, we, like the district court, make an independent decision based upon the same administrative record that was before the factfinder. Sierra Club v. Davies, 955 F.2d 1188, 1192 (8th Cir. 1992). Our task is to review the Board‘s decision and determine whether it was arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law.
We begin our attempt to unravel this tangled web by first noting that the terms of the contracts and escrow agreement at issue did not materially affect title to the Indian trust land. Accordingly, both the tribal court and state court jurisdiction to hear Thorstenson‘s claims for money damages.
Under
It is further understood and agreed that this contract shall be effective only in the event patents can be obtained to the land described above in Tract 2, for which application for patent is or will be made.
. . .
It is further understood and agreed that said land is presently in trust status and first parties are applying for patents and that this contract is effective only upon the issuance of the patents.
The provisions requiring prior BIA approval precede any conveyance of trust land and unless and until such application is made, nothing in the agreements touch upon trust land at all. Thus, we need not reach, much less run afoul of, the requirements under
Further, the Board and the district court apparently failed to recognize that Thorstenson‘s specific claim against Cudmore‘s estate (and his claim against Virginia in state court) did not involve title to the trust land at all–only money. Thorstenson only sought to enforce a money judgment based upon damages arising from payments both parties agreed were made by Thorstenson‘s predecessors-in-interest for land that was never transferred. Whether or not the BIA had yet approved of the initial contracts is neither here nor there as to Thorstenson‘s recovery for money paid, prematurely, for the trust land at issue prior to the establishment of the escrow account.
C. Thorstenson‘s Claim for Money Damages
Unfortunately, our determination concerning the validity of these contracts and the separate nature of the escrow agreement does not carry the day for Thorstenson. In this action, Thorstenson seeks to enforce his judgment, obtained against Virginia
D. Remaining Claims
Finally, Thorstenson raises constitutional claims on appeal including his claim that his expectation of continuing tenancy constitutes a property interest protected by the Constitution. However, we are unable to address any of Thorstenson‘s constitutional issues, as he did not appeal from the district court‘s March 2004 order, which analyzed and dismissed these claims. Thorstenson appeals only from the September 24, 2004, order, which reviewed the probate proceedings of the estate of Grover Cudmore. The September order also addressed Thorstenson‘s argument that he was denied a full and fair opportunity to present his claims to the ALJ, a claim that the district court denied, and Thorstenson does not raise this argument on appeal. As
III. CONCLUSION
Although both parties concede that Thorstenson‘s predecessors-in-interest overpaid the Cudmores by giving the Cudmores money for land that was never transferred, Thorstenson is left without redress in this court for that claim. For the reasons stated herein, we affirm the district court‘s grant of summary judgment in favor of the government and deny the same as to Thorstenson.