Gustafson v. Estate of Poitra

KAPSNER, Justice.

[¶ 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 Poi-tra 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. Gustaf-son 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. Gus-tafson 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 *845the 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 Poi-tras 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 Gustaf-son’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 ap*846peal 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.

Ill

[¶ 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. Her-zig, 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, 79 S.Ct. 269, 3 L.Ed.2d 251 (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, 79 S.Ct. 269); see also Three Affiliated Tribes of the Fort Berthold Reserva*847tion v. Wold Eng’g, P.C., 467 U.S. 188, 147-48, 104 S.Ct. 2267, 81 L.Ed.2d 113 (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, 79 S.Ct. 269. 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, 79 S.Ct. 269. Though the claimant was non-Indian, “He was on the Reservation and the transaction with an Indian took place there.” Id. Under the infringement test, tribal courts have exclusive civil jurisdiction over claims in which a non-Indian asserts a claim against an Indian for conduct occurring on that Indian’s reservation. Roe v. Doe, 2002 ND 136, ¶ 8, 649 N.W.2d 566 (citing Williams, at 223, 79 S.Ct. 269).

[¶ 11] Gustafson argued the state district court had subject matter jurisdiction in this case because the tribal court did not. Absent express congressional delegation, a tribe’s exercise of its sovereign powers is limited to what is necessary to protect tribal self-government or control internal relations, because tribes are domestic-dependent nations. Montana v. United States, 450 U.S. 544, 564, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981). Indian tribes do not have the inherent sovereign power to regulate non-members unless an exception to the general rule from Montana has been met. Id. at 565, 101 S.Ct. 1245. One exception allows a tribe to regulate “the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements.” Id. (citing Williams, 358 U.S. at 223, 79 S.Ct. 269). The United States Supreme Court “assume[s] that ‘where tribes possess authority to regulate the activities of nonmembers, civil jurisdiction over disputes arising out of such activities presumably lies in the tribal courts....’” Nevada v. Hicks, 533 U.S. 353, 358 n. 2, 121 S.Ct. 2304, 150 L.Ed.2d 398 (2001).

[¶ 12] Gustafson relies on the recent United States Supreme Court decision in Plains Commerce Bank v. Long Family Land & Cattle Co., Inc., 554 U.S. 316, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008), where the Court made a distinction between activities and transactions for a tribe’s adjudicative authority over nonmember defendants. See Plains Commerce Bank, at 334, 128 S.Ct. 2709. Plains Commerce Bank involved a sale between a non-Indian owned bank of non-Indian owned fee land located on the Cheyenne River Sioux Indian Reservation to non-Indians. Id. at 320, 128 S.Ct. 2709. The Long family, Cheyenne River Sioux Indians, had been leasing the land from the bank. Id. at 320-21,128 S.Ct. 2709. When the bank sold the land to non-Indians, the Long family sued in tribal court on a variety of claims, including discrimination by the bank in selling to non-Indians. Id. at 322, 128 S.Ct. 2709. The Supreme Court said the discrimination claim was essentially a restraint on alienation and analyzed the tribe’s adjudicative authority over the sale transaction of fee land between non-Indians. Id. at 331-32, 128 S.Ct. 2709. The Supreme Court held the tribal court did not have jurisdiction to adjudicate the discrimination claim on the sale of fee land between non-Indians. Id. at 320, 128 S.Ct. 2709. The jurisdictional facts of Plains Commerce Bank are distinguished from the facts of this case, because the present case involves a lease of Indian-owned fee land and the rights attached to the lease, and Gustafson initiated this case involving Indian defendants in the state court.

*848[¶ 13] “North Dakota has disclaimed jurisdiction over Indian reservation lands.” Winer, 2004 ND 21, ¶ 21, 674 N.W.2d 9 (citing Three Affiliated Tribes of the Fort Berthold Reservation, 467 U.S. at 142-43, 104 S.Ct. 2267). “[T]his Court has consistently held that state courts have no jurisdiction over civil causes of action involving Indians, arising within the exterior boundaries of an Indian Reservation, unless a majority of the enrolled residents of the Reservation vote to accept jurisdiction.” Id. at ¶ 10 (quoting Airvator, Inc. v. Turtle Mountain Mfg. Co., 329 N.W.2d 596, 600 (N.D.1983)). Under N.D.C.C. ch. 27-19, state courts may have jurisdiction over civil causes of action arising within the exterior boundaries of a reservation, if Indian citizens of the reservation have accepted state court jurisdiction. Id. (citing Airvator, Inc., at 600). In Winer, a majority of this Court held the district court correctly decided it lacked subject matter jurisdiction over a personal injury action brought by a non-Indian plaintiff against Indian defendants for damages resulting from a motor vehicle accident occurring within the exterior boundaries of the Spirit Lake Indian Reservation. Id. at ¶ 1. The Spirit Lake Tribe had not consented to state court civil jurisdiction. Id. at ¶ 10.

[¶ 14] The state district court did not have subject matter jurisdiction in this case. Gustafson asserted a claim against the Poitras over a lease of Indian-owned fee land located within the boundaries of the reservation. Under the infringement test, state jurisdiction over a claim asserted by a non-Indian against an Indian arising within the boundaries of that Indian’s reservation is prohibited. Roe, 2002 ND 136, ¶ 8, 649 N.W.2d 566. We cannot conclude, as Gustafson argued, the tribal court did not have jurisdiction under Montana, because Gustafson entered into a consensual relationship with the Poitras through the lease. 450 U.S. at 565, 101 S.Ct. 1245. There is an available forum for this matter in the tribal courts. See Kelly, 2009 ND 20, ¶11, 759 N.W.2d 721. The Turtle Mountain Tribal Code allows for the tribal court to exercise jurisdiction over the “Ownership, leasehold, use, or possession of any property, or interest therein, located within the Court’s territorial jurisdiction,” Turtle Mountain Tribal Code § 2.0102(l)(e), which includes “all land on the Turtle Mountain Indian Reservation.” Turtle Mountain Band of Chippewa Indians Const, and Bylaws art. II, § 1. Further, North Dakota has disclaimed jurisdiction over reservation lands, and the Turtle Mountain Band of Chippewa Indians has not consented to state court civil jurisdiction. See Turtle Mountain Band of Chippewa Indians Const, and Bylaws art. XIV, § 3(a); see also Turtle Mountain Tribal Code § 2.0102.

IV

[¶ 15] The district court did not have subject matter jurisdiction over this matter, and we vacate the default judgment.

[¶ 16] MARY MUEHLEN MARING, concurs. GERALD W. VANDE WALLE, C.J., concurs in the result.