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Darrel Gustafson and One Stop Market v. Estate of Leon Poitra and Linus Poitra

August 10, 2011

DARREL GUSTAFSON AND ONE STOP MARKET, PLAINTIFFS AND APPELLEES
v.
ESTATE OF LEON POITRA AND LINUS POITRA, DEFENDANTS AND APPELLANTS



Appeal from the District Court of Rolette County, Northeast Judicial District, the Honorable Michael G. Sturdevant, Judge. VACATED. Opinion of the Court by Kapsner, Justice.

The opinion of the court was delivered by: Kapsner, Justice.

Concurrence filed.

Gustafson v. PoitraNo. 20100277

[¶1] Linus Poitra appealed the default judgment entered by the district court regarding a lease between Darrel Gustafson as lessee and Leon Poitra and Linus Poitra as lessors. Linus Poitra argued the district court did not have subject matter jurisdiction to enter the default judgment because the Poitras are members of the Turtle Mountain Band of Chippewa Indians, and the land subject to the lease is Indian-owned fee land located within the boundaries of the Turtle Mountain Indian Reservation. Linus Poitra argued the default judgment infringed upon tribal sovereignty because of cases pending in the Turtle Mountain Tribal Court. We vacate the default judgment because the district court did not have subject matter jurisdiction over the lease.

I

[¶2] According to tribal court documents in the record before this Court, the Poitras are members of the Turtle Mountain Band of Chippewa Indians, and the land subject to the lease is fee land located within the boundaries of the Turtle Mountain Indian Reservation. Gustafson is non-Indian. Gustafson operates a business called One Stop Market in a building located in part on his land, and in part on land owned by Leon Poitra, now deceased. Gustafson entered into a lease with Leon Poitra and his son Linus Poitra in 1997 to use the building straddling the boundary line of his land and Leon Poitra's land. Leon Poitra died and his estate had entered probate proceedings in the Turtle Mountain Tribal Court ("tribal court") when this action was commenced. Gustafson filed a complaint in the state district court, alleging Leon Poitra's estate ("the Estate") owed him money for maintenance and repairs he made on the building. Gustafson asked the district court to declare the proportions of ownership of the building and land between him and the Estate. Gustafson asked the district court to make a declaratory judgment on what the Estate owed him, whether the building straddling the boundary should be sold or destroyed, and he asked that the lease be canceled. Tribal court filings in the record show Gustafson attempted to bring claims as a creditor against the Estate in the tribal court and had contested the jurisdiction of the tribal court.

[¶3] Linus Poitra and the Estate, with Raymond Poitra as personal representative of the Estate, filed a special appearance with the district court contesting its subject matter jurisdiction and personal jurisdiction over them. Linus Poitra and the Estate claimed the tribal court had jurisdiction over this matter because the property of the Estate was subject to probate in the tribal court, and there was a pending quiet title action between the Poitras and Gustafson in the tribal court. They also claimed the district court lacked jurisdiction because the building was located on land within the reservation boundaries. Linus Poitra and the Estate did not file an answer to Gustafson's complaint, nor did they file any other response besides the special appearance contesting jurisdiction. The district court held an omnibus hearing on the issue of the district court's jurisdiction. Gustafson appeared at the hearing represented by an attorney. Raymond Poitra appeared on behalf of the Estate, and Linus Poitra appeared without counsel. After the hearing, the district court ordered the parties to submit briefs on the jurisdictional issues. The Poitras did not file a brief, and the district court determined it had jurisdiction over the matter.

[¶4] The Poitras subsequently responded they needed more time to file responses because they were waiting for Raymond Poitra to be appointed as personal representative of the Estate in tribal court. Gustafson then moved for a default judgment because the Poitras had not filed an answer to his complaint. The Poitras responded in opposition to the motion for default judgment and again contested the jurisdiction of the district court. The district court did not hold a hearing on the merits of Gustafson's complaint and relied on the lease and an affidavit by Gustafson to enter a default judgment. The district court found Gustafson owned 25 percent of the land and building, and the Estate owned 75 percent of the land and building, based on Gustafson's affidavit. The district court found the lease was valid and ongoing and declared Gustafson was entitled to retain rent money he paid to escrow, because he paid for costs for which the Estate had been obligated. On appeal, Linus Poitra argued the district court did not have jurisdiction to hear this matter, and the court erred in declaring Gustafson owned 25 percent of the land and building, because a survey showed he owned 7 percent.

[¶5] On appeal, Linus Poitra, as a party who signed the lease, argued the district court did not have subject matter jurisdiction over Indian-owned fee land within the boundaries of the reservation that is part of an estate being probated in tribal court.

II

[¶6] Gustafson argued this appeal should be dismissed because Linus Poitra failed to first bring a motion for relief from the default judgment in the district court under N.D.R.Civ.P. 60(b). Linus Poitra appealed primarily on the issue of the district court's subject matter jurisdiction, but some of his arguments on appeal were on the merits of the case.

[¶7] The district court ordered the Poitras to file responsive pleadings. The Poitras' only responses were to contest the jurisdiction of the district court. The district court entered a default judgment after the Poitras failed to file an answer or respond to the merits of Gustafson's complaint. A party's exclusive means of opening a default judgment is to bring a motion in the district court under N.D.R.Civ.P. 60(b), instead of appealing directly from the default judgment. Flemming v. Flemming, 2010 ND 212, ¶ 3, 790 N.W.2d 762 (citing Shull v. Walcker, 2009 ND 142, ¶ 12, 770 N.W.2d 274). The district court may grant the motion for relief from a default judgment and decide the case on the merits, or the court may dismiss the motion for relief from a default judgment and then the defendant may appeal the denial of the motion for relief from a default judgment. Id. (citing State ex rel. Dep't of Labor v. Riemers, 2008 ND 191, ¶ 16, 757 N.W.2d 50; Overboe v. Brodshaug, 2008 ND 112, ¶¶ 8-9, 751 N.W.2d 177). Issues must be presented to the district court so the district court can develop the issues and a record for this Court to review on appeal. Id. (citing Bentley v. Bentley, 533 N.W.2d 682, 683 (N.D. 1995)). However, this Court may consider whether the district court had subject matter jurisdiction and may consider the issue sua sponte. Albrecht v. Metro Area Ambulance, 1998 ND 132, ¶ 9, 580 N.W.2d 583. In this case, the matter of jurisdiction was consistently, though inartfully and ineffectively, brought to the attention of the district court. We review the issue of the district court's jurisdiction over the subject matter of this case.

III

[¶8] Linus Poitra argued the district court did not have subject matter jurisdiction because the Estate was subject to probate in the tribal court. Gustafson argued the district court had jurisdiction because the case was about a lease and property rights, and the tribal court did not have jurisdiction over the lease and property. The issue is whether the state district court had jurisdiction to construe the provisions of a lease, and rights attached to the lease, for Indian-owned fee land within the exterior boundaries of the Turtle Mountain Indian Reservation, where the non-Indian lessee brought his claim against the Indian lessors in the state court.

[¶9] A judgment is void if the court entering the judgment did not have subject matter jurisdiction. Rolette Cnty. Soc. Serv. Bd. v. B.E., 2005 ND 101, ¶ 6, 697 N.W.2d 333 (citing McKenzie Cnty. Soc. Serv. Bd. v. C.G., 2001 ND 151, ¶ 10, 633 N.W.2d 157). "Subject-matter jurisdiction is the court's power to hear and determine the general subject involved in the action . . . ." Investors Title Ins. Co. v. Herzig, 2010 ND 138, ¶ 57, 785 N.W.2d 863 (quoting Albrecht, 1998 ND 132, ¶ 10, 580 N.W.2d 583). Subject matter jurisdiction is derived from the constitution and laws and cannot be conferred by agreement, consent, or waiver. Id. (citing Albrecht, at ¶ 10). "When the jurisdictional facts are not in dispute, the question of subject-matter jurisdiction is a question of law, and we review the jurisdiction decision de novo." Rolette Cnty. Soc. Serv. Bd., at ¶ 6. The parties have not disputed that the Poitras are members of the Turtle Mountain Band of Chippewa Indians, Gustafson is non-Indian, and the land Gustafson leases from the Poitras is fee land.

[¶10] "Relative to the issue of state court jurisdiction, if there is an available forum in the tribal courts, considerations of tribal sovereignty and the federal interest in promoting Indian self-governance and autonomy arise." Kelly v. Kelly, 2009 ND 20, ¶ 11, 759 N.W.2d 721 (quoting Rolette Cnty. Soc. Serv. Bd., 2005 ND 101, ¶ 6, 697 N.W.2d 333). A state court does not have jurisdiction over a civil action if state court jurisdiction undermines tribal authority. Luger v. Luger, 2009 ND 84, ¶ 8, 765 N.W.2d 523 (citing Winer v. Penny Enters., Inc., 2004 ND 21, ¶ 11, 674 N.W.2d 9). Under the infringement test set forth by the United States Supreme Court in Williams v. Lee, 358 U.S. 217, 223 (1959), state court jurisdiction over certain claims is prohibited if it would "undermine the authority of the tribal courts over Reservation affairs and hence would infringe on the right of the Indians to govern themselves." Kelly, at ¶ 11 (quoting Williams, at 223); see also Three Affiliated Tribes of the Fort Berthold Reservation v. Wold Eng'g, P.C., 467 U.S. 138, 147-48 (1984). In Williams, a non-Indian creditor operating a general store on reservation land brought an action against an Indian in state court. 358 U.S. at 217-18. The United States Supreme Court said, "There can be no doubt that to allow the exercise of state jurisdiction here would undermine the authority of the tribal courts over Reservation affairs and hence would infringe on the right of the Indians to govern themselves." Id. at 223. ...


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