Deutsche Bank National Trust Company v. Commonwealth Land Title Insurance Company

NOTICE OF MOTION AND MOTION to Dismiss Complaint

C.D. Cal.June 9, 2017

Notice of Motion to Dismiss of Defendant A.M. Segundo Page 1 Art Bunce, SBN 60289 1 buncelaw@aol.com Law Offices of Art Bunce 2 101 State Place, Suite C P.O. Box 2516 3 Escondido, CA 92033 Tel.: 760-489-0329 4 FAX: 760-489-1671 Attorney for Defendant Alana Mae Segundo 5 6 UNITED STATES DISCTIRCT COURT 7 CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION 8 9 DEUTSCHE BANK NATIONAL TRUST ) Case no. 2:17-cv-01361-AB (SK) 10 COMPANY, AS TRUSTEE, IN TRUST ) FOR REGISTERED HOLDERS OF ) NOTICE OF MOTION AND MOTION 11 WAMU ASSET-BACKED ) OF DEFENDANT ALANA MAE CERTIFICATES WAMU SERIES 2007- ) SEGUNDO TO DISMISS COMPLAINT 12 HE1 TRUST, ) Plaintiff ) 13 vs. ) ) 14 COMMONWEALTH LAND TITLE ) INSURANCE COMPANY; BUREAU OF ) [F.R.Civ. P. 12(b)(1),(6)] 15 INDIAN AFFAIRS; DORA SALGADO, an ) individual; ALANA MAE SEGUNDO, an ) Hearing: July 10, 2017 16 individual; BELINDA SUE SHORT; an ) 10:00 a.m. individual; MONICA LUTTERS, an ) Courtroom of Hon. Andre 17 individual; MARIA MENDEZ, an ) Birotte, Jr., #7B individual; LIZA PETE RODRIGUEZ, an ) 18 individual; and DOES 1-50, inclusive, ) ) 19 Defendants ) ____________________________________) 20 21 Case 2:17-cv-01361-AB-SK Document 56 Filed 06/09/17 Page 1 of 2 Page ID #:275 Notice of Motion to Dismiss of Defendant A.M. Segundo Page 2 TO PLAITIFF DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, IN 1 TRUST FOR REGISTERED HOLDERS OF WAMU ASSET-BACKED CERTIFICATES 2 WAMU SERIES 2007-HE1 TRUST, AND TO GINA L. ALBERTSON, ESQ., ITS 3 COUNSEL OF RECORD: 4 PLEASE TAKE NOTICE THAT, AT 10:00 a. m., or as soon thereafter as counsel 5 maybe heard, on July 10, 2017, in the Courtroom of the Honorable Andre Birotte, Jr., United 6 States Courthouse, 350 West First Street, Courtroom 7B, Los Angeles, CA 90012, the 7 undersigned counsel for defendant Alana Mae Segundo will move the Court, and hereby does 8 move the Court, pursuant to Rule 12(b)(1) and/or (6), F.R.Civ.P., for an order dismissing 9 plaintiff’s complaint. 10 This motion is based on this Notice of Motion, the accompanying Memorandum of 11 Points and Authorities, the Declaration of Ollie Beyal on file herein (Docket nos. 49-1 to 49-12 6), and the records, filings, and other documents filed and arguments made herein. 13 The grounds for this motion are that the Court lacks subject matter jurisdiction and the 14 complaint does not state a claim on which relief can be granted for the reason that the plaintiff 15 does not have an enforceable property or other interest in the property that is the subject of the 16 dispute (i.e., the subleasehold interest, deed of trust, or conveyances described in paragraphs 17 17-19 and elsewhere in plaintiff’s complaint). 18 This motion is made following the telephone conferences of counsel pursuant to L.R. 7-19 3, which took place on May 15, June 2 and 7, 2017, with further conferral scheduled for June 20 12, 2017. 21 Dated: June 9, 2017 22 /s/___________________________ 23 Art Bunce 24 Attorney for defendant 25 Alana Mae Segundo 26 Case 2:17-cv-01361-AB-SK Document 56 Filed 06/09/17 Page 2 of 2 Page ID #:276 Art Bunce, SBN 60289 1 buncelaw@aol.com Law Offices of Art Bunce 2 101 State Place, Suite C P.O. Box 2516 3 Escondido, CA 92033 Tel.: 760-489-0329 4 FAX: 760-489-1671 Attorney for Defendant Alana Mae Segundo 5 6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION 8 9 DEUTSCHE BANK NATIONAL TRUST ) Case no. 2:17-cv-01361-AB (SK) 10 COMPANY, AS TRUSTEE, IN TRUST ) FOR REGISTERED HOLDERS OF ) OPENING MEMORANDUM OF POINTS 11 WAMU ASSET-BACKED ) AND AUTHORITIES IN SUPPORT OF CERTIFICATES WAMU SERIES 2007- ) MOTION OF DEFENDANT ALANA 12 HE1 TRUST, ) MAE SEGUNDO TO DISMISS Plaintiff ) COMPLAINT 13 vs. ) ) 14 COMMONWEALTH LAND TITLE ) INSURANCE COMPANY; BUREAU OF ) [F.R.Civ. P. 12(b)(1),(6)] 15 INDIAN AFFAIRS; DORA SALGADO, an ) individual; ALANA MAE SEGUNDO, an ) Hearing: July 10, 2017 16 individual; BELINDA SUE SHORT; an ) 10:00 a.m. individual; MONICA LUTTERS, an ) Courtroom of Hon. Andre 17 individual; MARIA MENDEZ, an ) Birotte, Jr., #7B individual; LIZA PETE RODRIGUEZ, an ) 18 individual; and DOES 1-50, inclusive, ) ) 19 Defendants ) ____________________________________) 20 21 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 1 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 1 of 8 Page ID #:277 INTRODUCTION 1 While the defendant the Bureau of Indian Affairs (the “BIA”) has certainly set forth the 2 proper basis for dismissing the Plaintiff’s Complaint from the BIA’s point of view, defendant 3 Alana Mae Segundo (“Ms. Segundo”) wishes to make her own motion in order to present the 4 matter from the Indian landowner’s point of view. She wishes to emphasize the rationale for 5 the unqualified statement of 25 U.S.C. §348 that unapproved contracts or conveyances of any 6 interest in allotted trust land are “absolutely null and void”, and why this statute should be 7 broadly and literally construed to achieve its protective purpose in the overall leasing structure. 8 Because the deed of trust and other documents which the Plaintiff seeks to validate are 9 thus absolutely null and void, Plaintiff has failed to state a claim on which relief can be 10 granted, and the Court lacks subject matter jurisdiction over any claims based on such void 11 instruments. Ms. Segundo thus seeks dismissal under F.R.Civ.P., Rule 12(b)(1) and/or (6). 12 13 I. 14 FEDERAL LAW PREEMPTS AND COMPLETELY CONTROLS ALL MATTERS 15 REGARDING LEASING OF INDIAN TRUST LAND. 16 Federal law permeates and controls Indian affairs. “”With the adoption of the 17 Constitution, Indian relations became the exclusive province of federal law.” Oneida County 18 v. Oneida Indian Nation, 470 U.S. 226, 234 (1985). The Supreme Court has “consistently 19 described” the scope of federal law regarding Indians “as ‘plenary and exclusive’”. U.S. v. 20 Lara, 541 U.S. 193, 200 (2004). In the exercise of this authority, early federal policy was to 21 hold title to Indian lands in trust for specified tribes, by treaty, statute, or executive order. The 22 United States was the trustee, the tribe the beneficiary, and the land the corpus of the trust. 23 However, Congress later embarked on a policy of allotment by the “General Allotment Act of 24 1887 . . . 25 U.S.C. §331 et seq., which empowered the President to allot most tribal lands 25 nationwide without the consent of the Indian nations involved. . . . each allotted parcel would 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 2 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 2 of 8 Page ID #:278 be held by the United States in trust for a period of 25 years or longer”. County of Yakima v. 1 Yakima Indian Nation, 502 U.S. 251, 254 (1992). When the President failed to allot the Agua 2 Caliente Indian Reservation, Congress required it. See Arenas v. U.S., 322 U.S. 419 (1944). 3 The allotment process on this one reservation was completed by the Agua Caliente 4 Equalization Act of September 21, 1959, 25 U.S.C. §951, et seq. The allotment of Ms. 5 Segundo now in question was issued under this special statute that implemented the General 6 Allotment Act on only the Agua Caliente Indian Reservation. 7 The purpose of Congress by this Act of September 21, 1959, P.L. P.L. 86-326, was to 8 complete the allotment process for this one reservation. But Congress had a further purpose. 9 Because this reservation includes some of the most valuable real estate of any federal Indian 10 reservation, Congress wanted it to be developed by advantageous leasing for the benefit of the 11 Indian allottees, such as Ms. Segundo. Prior to 1959, the longest term that federal law allowed 12 for any business lease of allotted trust land was 25 years, with one 25-year extension. 25 13 U.S.C. §415. Because this term was insufficient for financing large-scale development, on the 14 very same day that Congress enacted the above statute to complete the allotment process on 15 this specific reservation, Congress also amended 25 U.S.C. §415 by the Act of September 21, 16 1959, P.L. 86-339, to allow leases of up to 99 years on only the Agua Caliente Indian 17 Reservation. (Congress has amended the statute to add many other reservations, but the Agua 18 Caliente Indian Reservation was the first to have long-term leasing authority. See the current 19 version of 25 U.S.C. §415(a).) To achieve this goal, the federal statutory scheme for leasing 20 of allotted trust land is comprehensive and preemptive. Regarding leases on this very same 21 Indian reservation, the Ninth Circuit has held that the federal scheme is “comprehensive”: 22 The Secretary is required to undertake detailed consideration of the 23 lease provisions to determine whether the lease furthers the best 24 interests of the Indian owner. See 25 U.S.C. Sec. 415(a); 25 C.F.R. 25 Sec. 162.5. The overriding federal interest is to obtain the “highest 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 3 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 3 of 8 Page ID #:279 economic return to the owner consistent with prudent management 1 and conservation practices.” 25 C.F.R. Sec. 162.8. Although daily 2 supervision is not required, major revisions in the lease arrangement, 3 such as subleases or assignments and rental adjustments require 4 Secretarial approval. 25 C.F.R. Sec. 162.12. 5 Segundo v. City of Rancho Mirage, 813 F.2d 1387, 1393 6 (9th Cir., 1987) 7 The Ninth Circuit held in Segundo that a local rent control ordinance was preempted by 8 federal law because allowing it to intrude into the comprehensive federal leasing process “’not 9 only would threaten to disrupt the federal and tribal regulatory scheme, but would also 10 threaten Congress’ overriding objective of encouraging tribal self-government an economic 11 development.’” Id. Therefore, the federal statutory and regulatory structure for the leasing of 12 allotted trust lands is both comprehensive and preemptive, necessarily precluding the 13 application of any contrary or different state law statutes or principles. 14 15 II. 16 THE HALLMARK OF THE FEDERAL LEASING PROGRAM IS PROTECTION 17 OF THE ALLOTTEE’S INTERESTS. 18 Not only is the federal leasing structure comprehensive, it is protective. The federal 19 trustee’s interest is to protect the Indian beneficiary, not those who lease allotted trust land. 20 For example, such non-Indian lessees are not within the zone of interests of 25 U.S.C. §415, 21 and thus lack standing to assert a claim under the statute. 22 The interests of Hollywood are not arguably within the zone of 23 interests by the Indian Long-Term Leasing Act . . . 25 U.S.C. 24 §415(a). The Secretary’s approval of leases of Indian land “is 25 consistent with the long-standing relationship between the Indians 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 4 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 4 of 8 Page ID #:280 and the government in which the government acts as a fiduciary with 1 respect to Indian property.” [cit.om.] That fiduciary relationship 2 requires the government to act for the benefit of Indian landowners 3 because Congress intended section 415 “to protect Indian tribes and 4 their members” [cit.om.] 5 Hollywood Mobile Estates, Ltd. V. Seminole Tribe, 641 F.3d 6 1259, 1269 (5th Cir., 2011). 7 8 Plaintiff acknowledges that §415(a) is primarily concerned with 9 protecting Native American interests by insuring that their land 10 transactions with third parties are advantageous. 11 Utah v. U.S. Department of the Interior, 45 F.Supp.2d 1279, 12 1283 (D.Utah., 1999); aff’d. 22 F.3d 221 (10th Cir., 1999) 13 Similarly, due to another provision of 25 U.S.C. §348 of the General Allotment Act, such 14 allotted trust lands are not subject to state or local taxation during the trust period. U.S. v. 15 Rickert, 188 U.S. 432 (1903). Nor is income directly derived by the allottee from such allotted 16 trust land subject to federal income taxation. Squire v. Capoeman, 351 U.S. 1 (1956). 17 Inducing an Indian allottee to execute any contract concerning or conveyance of an interest in 18 such allotted trust land without federal consent is a federal misdemeanor. 25 U.S.C. §202. 19 Another provision of the General Allotment Act, 25 U.S.C. §354, declares that such allotted 20 trust lands shall not “become liable to the satisfaction of any debt contracted prior to the 21 issuing of the final patent in fee therefor.” Similarly, 25 U.S.C. §410 states that “No money 22 accruing from any lease or sale of Lands held in trust by the United States shall be liable for 23 the payment of any debt of, or claim against, such Indian contracted or arising during such 24 trust period . . . except with the approval and consent of the Secretary of the Interior.” 25 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 5 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 5 of 8 Page ID #:281 Therefore, the purpose of the General Allotment Act and the Long-Term Leasing Act 1 that was invented specifically for the Agua Caliente Indian Reservation is to protect the Indian 2 allottee’s interests, particularly from overreaching non-Indians. The most common means that 3 Congress chose to extend this protection is to require the approval of the BIA for any 4 transactions directly affecting those interests. In short, Congress has declared in many ways 5 that the Indian interest is the federal interest. 6 IV. 7 25 U.S.C. §348 COMPLETELY INVALIDATES THE DEED OF TRUST AND 8 CONVEYANCES ON WHICH THE BANK RELIES. 9 One of the most important of the many protections of federal law for allottees is the 10 provision of the General Allotment Act in 25 U.S.C. §348 that states (emphasis added): 11 And if any conveyance shall be made of the lands set apart and 12 allotted as herein provided, or any contract made touching the 13 same, before the expiration of the time above mentioned, such 14 conveyance or contract shall be absolutely null and void. 15 This stark statute is one part of the comprehensive protective purpose of the General Allotment 16 Act and its implementing statutes and regulations, such as the Long-Term Leasing Act (25 17 U.S.C. §415(a)), described above. One purpose of 25 U.S.C. §348 is to deter such unapproved 18 contracts or conveyances in the first place by prohibiting any equity on the part of those who 19 engage in such unapproved transactions. This may sound harsh, but the Supreme Court has 20 held that there is no duty in the allottee to return any consideration paid under any such 21 unapproved contract or conveyance: 22 It is said that the allottees have received the consideration, and 23 should be made parties in order that equitable restitution may be 24 enforced. Where, however, conveyance has been made in violation 25 of the restrictions, it is plain that the return of the consideration 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 6 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 6 of 8 Page ID #:282 cannot be regarded as an essential prerequisite to a decree of 1 cancellation. . . . The effectiveness of the acts of Congress is thus not 2 to be destroyed. The restrictions were set forth in public laws, and 3 were matters of general knowledge. Those who deal with the 4 Indians contrary to these provisions are not entitled to insist that they 5 should keep the land if the purchase price is not repaid, and thus 6 frustrate the policy of the statute. 7 Heckman v. U.S., 224 U.S. 413, 446 (1911) 8 Such harsh treatment of those who flout such a remedial statue is not confined to 25 9 U.S.C. §348. The Supreme Court has held that this so as a general principle regarding such 10 illegal contracts regarding Indian allotted trust land in general: 11 A contract that on its face requires an illegal act, either by the 12 contractor or by a third person, no more imposes a liability to 13 damages for nonperformance than it creates an equity to compel the 14 contractor to perform. . . . [cit.om.] And, more broadly, it long has 15 been recognized that contracts that obviously and directly tend in a 16 marked degree to bring about results that the law seeks to prevent 17 cannot be made the ground of a successful suit. 18 Sage v. Hampe, 235 U.S. 99, 105 (1914, per O.W. Holmes) 19 The Ninth Circuit has applied this principle to another conveyance of an interest in the allotted 20 trust lands of the Agua Caliente Indian Reservation itself in affirming this Court: 21 The purpose of this section [25 U.S.C. §348], as with much of the 22 law relating to Indians, is paternal in character. . . . No ruse, no 23 contract, no act of any kind, however solemn or well intended, could 24 result in the loss of the allotment. Thus did Congress act to make 25 amends for past wrongs . . . [¶] Therefore, whenever a sale of 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 7 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 7 of 8 Page ID #:283 property has been made by an Indian during the trust period the 1 courts have not hesitated to strike it down as void. Even if fair 2 consideration has been given for the property the sale will not be 3 allowed to stand; nor need the Indian first return the consideration. 4 Bacher v. Patencio, 232 F.Supp. 939, 941 (C.D.Cal., 1964); 5 aff’d., 368 F.2d 1010 (9th Cir., 1966) 6 7 CONCLUSION 8 Applying 25 U.S.C. §348 is dispositive of this motion. The deed of trust and 9 conveyances that the Bank seeks to validate, and on which it bases its other claims, all 10 presume that they are valid instruments under federal law. However, under 25 U.S.C. §348 11 they are necessarily “absolutely null and void” if not approved by the BIA. The Declaration of 12 Ollie Beyal states that they were never approved by the BIA. Whether the Bank was provided 13 proper notice is a false issue. The Bank was the holder of instruments which, by statute, are 14 “absolutely null and void”. As noted in the cases cited above, such void instruments produce 15 no equity at all in their holder, no property interest, and thus no standing to assert any 16 “absolutely null and void” interest. The Bank was not entitled to any notice of the intended 17 cancellation of the “absolutely null and void” sublease conveyances or deed of trust. 18 Ms. Segundo therefore urges the Court to dismiss the complaint as against her for lack 19 of subject matter jurisdiction and failure to state a claim on which relief might be granted. 20 Dated: June 9, 2017 Respectfully submitted, 21 22 /s/________________________________ 23 Art Bunce, Attorney for 24 Defendant Alana Mae Segundo 25 26 Opening Memo of P’s and A’s on Motion to Dismiss of Defendant A.M. Segundo Page 8 Case 2:17-cv-01361-AB-SK Document 56-1 Filed 06/09/17 Page 8 of 8 Page ID #:284 Case 2:17-cv-01361-AB-SK Document 56-2 Filed 06/09/17 Page 1 of 1 Page ID #:285 Art Bunce, SBN 60289 1 buncelaw@aol.com Law Offices of Art Bunce 2 101 State Place, Suite C P.O. Box 2516 3 Escondido, CA 92033 Tel.: 760-489-0329 4 FAX: 760-489-1671 Attorney for Defendant Alana Mae Segundo 5 6 UNITED STATES DISCTIRCT COURT 7 CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION 8 9 DEUTSCHE BANK NATIONAL TRUST ) Case no. 2:17-cv-01361-AB (SK) 10 COMPANY, AS TRUSTEE, IN TRUST ) FOR REGISTERED HOLDERS OF ) ORDER GRANTING MOTION OF 11 WAMU ASSET-BACKED ) DEFENDANT ALANA MAE SEGUNDO CERTIFICATES WAMU SERIES 2007- ) TO DISMISS COMPLAINT 12 HE1 TRUST, ) Plaintiff ) 13 vs. ) ) 14 COMMONWEALTH LAND TITLE ) INSURANCE COMPANY; BUREAU OF ) [F.R.Civ. P. 12(b)(1),(6)] 15 INDIAN AFFAIRS; DORA SALGADO, an ) individual; ALANA MAE SEGUNDO, an ) 16 individual; BELINDA SUE SHORT; an ) individual; MONICA LUTTERS, an ) 17 individual; MARIA MENDEZ, an ) individual; LIZA PETE RODRIGUEZ, an ) 18 individual; and DOES 1-50, inclusive, ) ) 19 Defendants ) ____________________________________) 20 21 Order Granting Motion of A.M. Segundo to Dismiss Page 1 Case 2:17-cv-01361-AB-SK Document 56-3 Filed 06/09/17 Page 1 of 2 Page ID #:286 The motion to dismiss of defendant Alana Mae Segundo came on regularly for hearing 1 before the Honorable André Birotte on July 10, 2017, and the Court having considered the oral 2 argument at the time of the hearing, as well as the pleadings, declarations, arguments, and 3 other evidence filed in support of and in opposition to the motion to dismiss, 4 IT IS HEREBY ORDERED, ADJUDGED,AND DECREED that Plaintiff’s complaint 5 is dismissed with prejudice against defendant Alana Mae Segundo. 6 7 Dated this ___ day of July, 2017 8 9 _________________________________ 10 ANDRÉ BIROTTE 11 United States District Judge 12 Order Granting Motion of A.M. Segundo to Dismiss Page 2 Case 2:17-cv-01361-AB-SK Document 56-3 Filed 06/09/17 Page 2 of 2 Page ID #:287