Terry Harrington v. City of Council Bluffs

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 11-2502
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Maynard Bernard; Florine Bernard, *
*
Plaintiffs - Appellants, *
* Appeal from the United States
v. * District Court for the
* District of South Dakota.
United States Department of the Interior;*
Secretary of Department of Interior; *
Board of Indian Hearings and Appeals; *
Great Plains Regional Director of the *
Bureau of Indian Affairs, *
*
Defendants - Appellees, *
*
Grady Renville, *
*
Defendant. *
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Submitted: March 14, 2012
Filed: April 6, 2012
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Before MURPHY and GRUENDER, Circuit Judges, and ROSS, District Judge.1
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MURPHY, Circuit Judge.
The Honorable John A. Ross, United States District Judge for the Eastern1
District of Missouri, sitting by designation.

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Maynard Bernard decided to develop some of the Indian trust land he owned
on the Sisseton Wahpeton Reservation in a project planned with his cousin Grady
Renville. Bernard and Renville consulted a Bureau of Indian Affairs (BIA) realty
officer about how to proceed. She advised Bernard to sign a gift deed to convey the
entire property to himself and Renville as joint tenants with the right of survivorship.
The agency subsequently denied a request by Bernard and his wife Florine to set
aside the deed. After an unsuccessful administrative appeal the Bernards brought an
action in federal district court against the United States Department of the Interior
(the Department) seeking review of the agency decision and money damages for
breach of trust. The Bernards later amended their complaint to eliminate the damage
claim and subsequently settled with Renville, who agreed to deed back some of the
land. After the district court affirmed the administrative decision and dismissed the2
Bernards' action, they moved to alter the judgment, seeking transfer of their damage
claim to the Court of Federal Claims (CFC). The district court denied the motion, and
the Bernards appeal. We affirm.
I.
Bernard owned approximately 45.5 acres of land held in trust by the United
States for his benefit on the Sisseton Wahpeton Indian Reservation in South Dakota.
Maynard and Florine Bernard are both members of the Sisseton Wahpeton Tribe. In
2004 Bernard entered into an agreement with his second cousin Renville to develop
the section of Bernard's land that abutted Pickerel Lake and to share profits from the
sale of individual lots. Renville was to provide the capital for this development.
The Honorable Charles B. Kornmann, United States District Judge for the2
District of South Dakota.
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Bernard obtained permission from the Sisseton Wahpeton Tribal Council to take the
lakefront acres out of trust.3
Bernard and Renville met with realty officer Carol Jordan at the BIA office in
Sisseton in April 2004. Bernard states that the purpose of the meeting was to make
arrangements to have the land taken out of trust. Jordan stated at her deposition that
she advised them to leave the land in trust status and wait to obtain a fee patent until
development was completed in order to avoid tax consequences. She also suggested
use of a gift deed so that Renville could "protect whatever monetary interest that he
was going to be putting into the project." She further suggested a joint tenancy with
the right of survivorship because the two men had verbally agreed that they would
"take care of each other's families." Renville filled out a gift deed application for
Bernard because he apparently had some vision problems.
The application stated that Bernard intended to gift convey 45.5 acres to
himself and Renville in a joint tenancy with the right of survivorship. The reason
listed for the conveyance was "joint business venture." The application also indicated
that Bernard waived his right to an appraisal. He signed the application, and on April
20 Jordan brought a gift deed to the Bernards' house, where Maynard and his wife
Florine both signed it. The BIA superintendent approved the deed in May 2004, and
it was subsequently recorded.
Bernard contends that he had not understood that he gift deeded his land to
Renville. He claims that Jordan misrepresented the effect of signing the deed and that
he thought he was signing a mortgage. According to Bernard, Jordan never
mentioned anything about a gift conveyance. Instead she assured him that the
arrangement was temporary and that no deed would ever be filed. Jordan testified at
Bernard originally requested permission to take out 10 acres; however a3
survey later revealed that the amount of lakefront land was approximately 17 acres.
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her deposition that she told the Bernards that the gift conveyance was going to be a
"temporary situation" because Renville had orally agreed to reconvey to Bernard the
land not intended for development. Jordan also stated in an affidavit that she
explained the nature of a joint tenancy and a right of survivorship to Bernard and
Renville.
Several months after the deed was signed, the development plan fell apart.
According to Bernard, his relationship with Renville deteriorated, the project "failed
dismally," and Renville stopped working on it without relinquishing his interest in the
land. Renville claims to have spent approximately $200,000 developing the land.
The Bernards allege that they did not receive a copy of the gift deed until June
2004, after the deed had already received final approval from the BIA superintendent.
They wrote to the superintendent alleging that the agency had breached its fiduciary
duty by misrepresenting the effect of signing the deed. The superintendent denied
their request to set aside the deed, stating that he did not have the authority to do so.
The Bernards appealed to the regional director, adding that the BIA had violated its
own regulations in approving the gift deed. The regional director affirmed the
decision not to rescind the deed, concluding that agency procedures had been
followed, that Jordan had explained the nature of the gift conveyance, and that Jordan
had observed that Bernard was "capable of understanding everything that was
explained."
The Bernards appealed to the Interior Board of Indian Appeals (IBIA), which
affirmed the regional director's decision. The Board concluded that no violation of
agency regulations had occurred which might render the deed void. The Board did
not reach the merits of the Bernards' breach of trust claims, stating that it had no
authority to grant the requested relief of declaring the gift deed null and void based
on an alleged breach of trust. See Maynard & Florine Bernard v. Acting Great Plains
Reg'l Dir., 46 I.B.I.A. 28 (2007).
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In October 2008 the Bernards brought this action against the Department
seeking review of the IBIA's decision not to set aside the deed, as well as money
damages for breach of "fiduciary duty and trust responsibility." The complaint
alleged that the BIA had breached its fiduciary duty by failing to explain the effect
of signing a gift deed, misrepresenting it as only a "temporary arrangement," and
unduly influencing the Bernards to sign it. They asserted jurisdiction under the
Administrative Procedure Act (APA), 5 U.S.C. §§ 701–706, as well as the Tucker
Act, 28 U.S.C. § 1491(a)(1). The Tucker Act provides that the CFC has exclusive
jurisdiction over non tort claims for money damages against the United States in
excess of $10,000. Id.; See Weeks Const., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d
668, 675 (8th Cir. 1986).
The Department moved to dismiss the Bernards' complaint in January 2009,
arguing that the claim for money damages deprived the district court of jurisdiction
under the APA and that the CFC had exclusive jurisdiction over claims against the
United States for money damages in excess of $10,000. The Bernards amended their
complaint in response, eliminating their request for money damages and the
jurisdictional reference to the Tucker Act and adding Renville as a defendant. They
subsequently clarified that they were "seeking APA review [of the IBIA decision not
to set aside the deed] and not money damages" and acknowledged that any money
damages claim "would be required to be brought in the [CFC]."
In February 2011 the district court ordered the Bernards and Renville to
mediate their land dispute. They subsequently reached a settlement in which the
parties agreed to split the proceeds from the sale of the 17 acres abutting the lake that
had been intended for development, and Renville agreed to return the remaining acres
to the Bernards. The Department of the Interior was not a party to the settlement
agreement.
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The district court affirmed the IBIA decision in March 2011, concluding that
it was not arbitrary, capricious, an abuse of discretion, or otherwise contrary to the
law. See 5 U.S.C. § 706(2)(A). It also concluded that since the BIA had not "passed
upon any question of breach of trust responsibilities," administrative remedies had not
been exhausted on those claims and it had no jurisdiction to consider them. The
district court commented that "[n]o competent lawyer would have permitted the
parties to proceed as they did," but that Jordan "did exactly what the plaintiffs
requested and there is no evidence of the employee holding herself out as a lawyer or
even a real estate agent." It stated that while establishing a joint tenancy was
"certainly unwise and dangerous," it was unfortunately not an "unfamiliar situation
where lay people undertake activities without legal advice . . . without foreseeing the
trouble to come 'down the road'" and that the parties "expected lawyers and a court
to unravel their casual and reckless doings." The district court entered an order
dismissing the case.
The Bernards then filed a motion to alter the judgment under Federal Rules of
Civil Procedure 59(e) and 60. They sought to have their money damages claim
against the United States for breach of trust transferred to the CFC, citing the federal
transfer statute, 28 U.S.C. § 1631. The district court denied the motion. It concluded
that while transfer might be in the "interest of justice," the Bernards had not met the
other requirements for transfer under § 1631 because they had abandoned their
Tucker Act claim for money damages in 2009. Thus "there were no claims pending
for money damages or for claimed breach of trust" at the time it had dismissed the
action. It also noted that the six year statute of limitations for CFC claims "may well
have expired," and that the Supreme Court's interpretation of 28 U.S.C. § 1500 in
United States v. Tohono O'Odham Nation, 131 S. Ct. 1723 (2011), provided further
support for the denial of the Bernards' motion. Section 1500 bars CFC jurisdiction
when the plaintiff has a suit against the United States "for or in respect to" the same
claim pending in another court.
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The Bernards appeal the denial of the motion to alter the judgment, arguing that
they had not abandoned their breach of trust claim, that neither the statute of
limitations nor Tohono prevent transfer, and that transfer would be in the interest of
justice.
II.
We review the district court's denial of the Bernards' Rule 59(e) motion to alter
the judgment for an abuse of discretion. Twin City Constr. Co. of Fargo v. Turtle4
Mountain Band of Chippewa Indians, 911 F.2d 137, 139 (8th Cir. 1990). We will
find an abuse of discretion only if the district court's judgment "was based on clearly
erroneous factual findings or erroneous legal conclusions." Margolies v. McCleary,
Inc., 447 F.3d 1115, 1125 (8th Cir. 2006) (citation omitted).
In their motion to alter the judgment the Bernards asked the district court to
transfer their money damages claim to the CFC, noting that the six year statute of
limitations would prevent them from simply refiling that claim there. See 28 U.S.C.
§ 2501. The transfer statute provides:
Whenever a civil action is filed in a court . . . and that court finds that
there is a want of jurisdiction, the court shall, if it is in the interest of
justice, transfer such action or appeal to any other such court in which
the action or appeal could have been brought at the time it was filed or
noticed, and the action or appeal shall proceed as if it had been filed in
or noticed for the court to which it is transferred on the date upon which
it was actually filed in or noticed for the court from which it is
transferred.
Although the Bernards' motion to alter the judgment cited both Rule 59(e) and4
Rule 60, their attorney stated at oral argument that the motion was intended under
Rule 59(e), not Rule 60.
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Id. The district court concluded the requirements for transfer under § 1631 were not
met and denied the motion.
We conclude that the requirements for transfer under § 1631 were not met in
this case. Several years before the district court entered its final judgment, the
Bernards abandoned their claim for money damages under the Tucker Act by
amending their complaint to eliminate all reference to that claim. They clarified
several times that there was no longer a claim for money damages and acknowledged
that they understood that any such claim had to be brought in the CFC. Because there
was no money damages claim pending at the time the district court entered its final
judgment in March 2011, there was no action which the district court could have
transferred under § 1631. See In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396
F.3d 922, 928 (8th Cir. 2005) ("[A]n amended complaint supercedes an original
complaint and renders the original complaint without legal effect."); Rogers v. United
States, 26 Cl. Ct. 1023, 1029 (1992) (court may not transfer claim under § 1631 if not
alleged in complaint). The district court thus did not abuse its discretion in denying
the Bernards' motion to alter the judgment.
The Bernards urge the court to look at the original complaint instead of the
amended complaint to find that their money damages claim still existed for the
purposes of transfer. They cite removal cases where a court ordered a party to amend
a complaint or the decision to amend was "otherwise involuntary." In such cases the
court then looks to the original complaint to determine whether removal to federal
court was proper. E.g. In re Atlas Van Lines, Inc., 209 F.3d 1064, 1067 (8th Cir.
2000). The Bernards offer no authority indicating that the involuntariness exception
to the amended complaint rule applies outside of the removal context, and we
conclude that it is not applicable here.
Even if the money damages claim had still been pending at the time of
dismissal, transfer in this case would have been prohibited by 28 U.S.C. § 1500. That
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statute provides that the CFC "shall not have jurisdiction of any claim for or in
respect to which the plaintiff . . . has pending in any other court any suit or process
against the United States." The Federal Circuit has clarified that § 1500 prevents
transfer to the CFC of a claim filed in the district court simultaneously with another
claim which the statute considers to be the same. United States v. Cnty. of Cook, Ill.,
170 F.3d 1084, 1091 (Fed. Cir. 1999). This is because the transfer statute directs that
the transferred action "shall proceed as if it had been filed in . . . the court to which
it is transferred on the date upon which it was actually filed in . . . the court from
which it is transferred." 28 U.S.C. § 1631. The Bernards do not dispute that their
APA claim and their Tucker Act claim for money damages are "for or in respect to"
the same claim for purposes of § 1500. See United States v. Tohono O'Odham
Nation, 131 S. Ct. 1723, 1731 (2011) ("Two suits are for or in respect to the same
claim, precluding jurisdiction in the CFC, if they are based on substantially the same
operative facts, regardless of the relief sought in each suit."). Thus, even if the
Bernards had not withdrawn their damage claim, transfer would not have been
permitted because the APA claim would have been considered "pending" and § 1500
would have barred CFC jurisdiction. 170 F.3d at 1091.
We recognize that the facts of this case are troubling. Apparently on her own
initiative, the BIA realty officer advised Bernard to sign a gift deed conveying half
of his interest in his entire property to Renville in a joint tenancy with the right of
survivorship. In addition she told Bernard that this would be only a "temporary"
arrangement based on Renville's alleged oral assurances, and she permitted Bernard
to waive appraisal of his land before the transfer. She also allowed Renville to fill out
the gift deed application, apparently because Bernard's eyesight was so bad he could
not do it himself.
The Bernards do not challenge the district court's decision on the merits of their
APA claim, however, and they were not left completely without a remedy. Through
a settlement with Renville, they received half of the proceeds from the sale of the
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property originally intended for the joint venture and Renville deeded back the
remaining acres.
III.
We conclude that the district court did not abuse its discretion by denying the
motion to alter the judgment to transfer the money damages claim to the CFC since
the Bernards had withdrawn that claim several years before final judgment was
entered. Accordingly, the judgment of the district court is affirmed.
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