UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Transcription

1 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 R. Bruce Johnston, WSBA # Johnston Jacobowitz & Arnold, P.C. 0 First Avenue, Suite 0 Seattle, WA ( -0; Fax: ( - bruce@jjalaw.com Dale M. Foreman, WSBA #0 Foreman, Appel, Hotchkiss, Zimmerman & Bauscher, PLLC Wenatchee, WA 0 (0-0; Fax: ( -0 dale@fahzlaw.com The Honorable Justin L. Quackenbush UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON PAUL GRONDAL, a Washington resident and THE MILL BAY MEMBERS ASSOCIATION, INC., a Washington Non-Profit Corporation, Plaintiffs, v. UNITED STATES OF AMERICA; UNITED STATES DEPARTMENT OF THE INTERIOR; THE BUREAU OF INDIAN AFFAIRS; et al., Defendants. Case No. :0-cv-00-JLQ WAPATO HERITAGE, LLC S RESPONSE TO COURT S ORDER DATED JUNE, (ECF NO. Wapato Heritage, LLC, files this document in response to the Court s order dated June,, ECF No., regarding the 0 settlement of the action in Chelan County Superior Court regarding MA-. To provide the Court additional PAGE (0-0 Fax (0-0

2 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 context for the settlement and its relation to the parties, Wapato Heritage discusses some events that are predicated on the binding effect of the settlement. A. History of Rent Paid Pursuant to the 0 Settlement. Pursuant to the Court s previous order, ECF No., Wapato Heritage submitted documentation from its manager, Jeff Webb, that detailed the rental payments received by Wapato Heritage and rents paid to the Bureau of Indian Affairs ( BIA. See ECF No. - to -. In specific answer to the Court s question regarding receipt of the funds by the landowners, following the 0 settlement, Wapato Heritage voluntarily paid to the landowners an amount equal to approximately 0% of the rent received from the Mill Bay Members for 0 and 0, even though it was not required to pay anything other than rent under the terms of the Master Lease. ECF No. -. As noted in Mr. Webb s letter, thereafter Wapato Heritage s IIM account was frozen by the BIA due to litigation between various heirs of William W. Evans, which litigation was ultimately settled, as further described below. ECF No. -. Thereafter, Wapato Heritage paid.% of the Mill Bay rents to the BIA each year until the BIA refused to accept any rent in 0. See ECF No. - at, -, -, 0-. The checks were mailed to the BIA, who had the fiduciary obligation to forward them to the landowners. ECF No. -. Wapato Heritage had PAGE (0-0 Fax (0-0

3 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 planned to pay the remaining 0% of the settlement funds (which, again, were simply rent received at that time following approval of a new lease it was attempting to obtain from the landowners. When some of the landowners demanded the full payment, to which they had no legal right, Wapato Heritage agreed to pay those sums at that time. ECF No. -. After the ruling by Judge Whaley in Wapato Heritage, LLC v. United States, No. CV-0--RHW, the BIA, despite its fiduciary status vis-à-vis the landowners, no longer accepted any rental payments from Wapato Heritage under the Master Lease. ECF No. -. Wapato Heritage has continued to receive and accept rental payments from the Mill Bay Members and retain them in a reserve account, applying them to the overpayment of rent detailed in the Sells Audit. ECF No. -. Even so, due to the voluntary payments by Wapato Heritage following the 0 settlement, the rents already paid to the landowners are greater than the rents they would be entitled to under the Master Lease if paid through this year. See Decl. of Jeff Webb. B. Participation of BIA and Colville Tribes in 0 Settlement. In a previous declaration, Mr. Webb has stated what occurred at the mediation that led to the settlement. See ECF No.. Further, counsel for Wapato Heritage inquired with the Chelan County Superior Court, and there are no transcripts or PAGE (0-0 Fax (0-0

4 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 records of the state court proceedings related to the 0 settlement, only two for hearings that occurred years later. A comprehensive annotated history of the 0 lawsuit, its procedure, sequence, and the involvement of the BIA, CTEC and the Colville Tribes is set forth in ECF No. -, upon which Wapato Heritage relies in this response. C. Relevance of RCW Chapter.A. The Court is correct to note that the 0 settlement was approved by the Chelan County Superior Court and bound, among others, the beneficiaries to the Estate of William W. Evans, Jr pursuant to RCW.A.0-0. RCW.A.0( provides that a filed agreement is equivalent to a final court order binding on all persons interested in the estate or trust. The Confederated Tribes of the Colville Nation ( Colville Tribes is such a beneficiary and is bound by the 0 settlement. The Colville Tribes had full and complete notice of all Chelan County Superior Court proceedings. ECF No. -. It should be mentioned that when Wapato Heritage s predecessor in interest, Chief Evans, Inc., attempted to bring the issues which were subsequently the subject of the settlement before the Colville Tribal Court, the action was dismissed by that court for lack of jurisdiction. ECF No. -. PAGE (0-0 Fax (0-0

5 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 The last will of William Evans provides that his interests in MA- and MA-0 were, following various life estate bequests, bequeathed to his great-grandchildren and the Colville Tribes. Decl. of Bruce Johnston, Ex. A (... Following the estate litigation among the heirs, the parties entered a settlement in 0 ( 0 settlement, which changed this scheme. ECF No. ; ECF No. 0- at -. As detailed below, Mary Wynne, the attorney for Evans s daughter, Sandra Evans, duped her client and the great-grandchildren out of their inheritance and orchestrated leaving the full remainder interests in the Moses Allotments to the Colville Tribes. ECF No. 0- at. In other words, because of Mary Wynne s duplicity, the great-grandchildren lost property worth potentially tens of millions of dollars, and the Colville Tribes gained this property at no cost, contrary to the terms of Mr. Evans s will, under which, to get the property, the Colville Tribe would be required to purchase the interests at their fair market value. It cannot be disputed that the Colville Tribes are a beneficiary of William Evans s estate, whether one considers the will or the 0 settlement. Further, the 0 settlement was approved both by the state court in the probate proceeding, see ECF No. 0- at -, and the federal probate court, see Decl. of Johnston, Ex. Mary Wynne was also employed by the Colville Tribes as a Tribal Judge. Decl. of Johnston, Ex. B-D. PAGE (0-0 Fax (0-0

6 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 E. Both the Colville Tribes and the BIA had notice of these proceedings, did not object to them, and accepted the results thereof. And, after accepting the results of the approved 0 Settlement, the BIA, the Colville Tribes and the landowners accepted its benefits. ECF No. -. The 0 settlement references the Master Lease and Mr. Evans s rights under it, these assets formed a material part of the 0 settlement, see ECF No. 0- at -, which adjusted the interests of the beneficiaries in the various estate assets, balancing the rights of the heirs according to the estate s perceived interests in the assets. The 0 settlement was integral to defining the estate s rights in the Moses Allotments and affected the later settlement negotiations in the estate litigation. The 0 settlement was considered by Judge Stancampiano in the Federal Probate, and he decided it was fair and equitable. ECF No.. Again, the Colville Tribes and the BIA had notice of all these proceedings and accepted their results and benefits without objection. As but one example, in a letter dated February, 0 to the landowners of MA-, Mr. Nicholson as a representative of the BIA stated: Find enclosed one half of the payment [the landowners] will be receiving on the RV Park settlement monies. This was the agreement Wapato Heritage LLC, and the RV Members came to on the RV Park Litigation. The RV Members will pay $, now, and $, per year through. PAGE (0-0 Fax (0-0

7 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 ECF No. - at (emphasis added. As a beneficiary of Mr. Evans s estate, the Tribes are bound under RCW.A.0 to the terms of the 0 settlement, which includes recognition of the Mill Bay Members right to remain on MA- until. D. The Fraud of Mary Wynne. First, there can be no doubt that Mary Wynne regularly breached her duties as an attorney to Sandra Evans regarding Ms. Evans interests in the estate of her father, William Evans, who died on September, 0. In June, the Washington State Bar Association twice reprimanded Ms. Wynne for some of her misconduct while representing Ms. Evans. Decl. of Johnston Exs. F-I. Ms. Wynne s other misconduct was detailed by the Hon. Edward F. Shea in a hearing wherein the court prohibited Ms. Wynne from representing Ms. Evans. Id. Ex. J. On several occasions the Court found Ms. Wynne had proceeded with an irreconcilable conflict of interest. When Ms. Evans obtained counsel who truly represented Ms. Evans, Sandra Evans sued Ms. Wynne for approximately $. million. Id. Ex. K. Before trial, Ms. Wynne and her husband, Daniel Gargan, dismissed their bankruptcy case to avoid the trial. In apparent recognition of their serious issues, Ms. Wynne and Mr. Gargan PAGE (0-0 Fax (0-0

8 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 have sought sanctuary on the Rosebud Reservation in South Dakota, where she apparently became a tribal judge. See Decl. of Johnston, Ex. B. Ms. Wynne was also found to have acted improperly in regard to the malpractice action commenced against her by Ms. Evans in Chelan County. A relatively complete description of that breach of duty by Ms. Wynne is set forth in an Order of the Arizona District Court. See id., Ex. L. While these defalcations were most serious, and substantially injured Ms. Wynne s client, Sandra Evans, Ms. Wynne s most egregious breach of fiduciary duty, and her duties as an attorney, was her conspiracy with Gene Nicholson of the BIA, for no consideration, to pass the full value of William Wapato Evans legacy to the Colville Tribes, rather than his heirs, as provided by his will. The document identified as Danielson is a document produced by the BIA in response to a FOIA request. Id.. Wynne met with Gene Nicholson and others, and Wynne, without authority from her client, and contrary to her duties as Ms. Evans lawyer bargained away the residuary interest of Mr. Evans (and Ms. Evans and Wapato Heritage in the entire MA- property. Id. This change in favor of the Colville Tribes is also evidenced by comparing Mr. Evans s will with the 0 settlement, approved by both the federal and state probate courts. Compare Decl. of Bruce Johnston, Ex. A (.. with ECF No. 0- at -. As with her other conflicts of interest, PAGE (0-0 Fax (0-0

9 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 Ms. Wynne ignored that she had been an employee of the Colville Tribes as a tribal judge. In that connection, because Ms. Wynne was clearly not representing the interests of Sandra Evans, it is a fair inference that she was representing the interests of her longtime employer, the Colville Tribes. Accordingly, Ms. Wynne should be seen as acting as an agent of the Colville Tribes. Interestingly, Ms. Wynne opposed the 0 settlement, and her opposition was overruled. ECF No.,. Likewise, Mr. Gargan, the husband and business associate of Ms. Wynne attended the 0 mediation. ECF No. at -. He can also be seen as an agent, de facto or de jure, of the Colville Tribes in regard to his attendance and participation in the mediation. E. Status of MA- as Fee Land. The parties have extensively briefed the issue of whether MA- is fee land; Wapato Heritage continues to assert that it is. See, e.g., ECF No.. Nothing contained in this response or filed with it should be construed to contravene that position. If MA- is fee land, then unquestionably the state court order binding the beneficiaries to the 0 settlement applies the Colville Tribes. But even if MA- remains trust land, the Colville Tribes and other beneficiaries are estopped from seeking to eject the Mill Bay Members until, for reasons well articulated by the Members. See, e.g., ECF No.. PAGE (0-0 Fax (0-0

10 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID.0 Page 0 of DATED this th day of July,. JOHNSTON JACOBOWITZ & ARNOLD, P.C. /s/ R. Bruce Johnston R. Bruce Johnston, WSBA # 0 First Street, Suite 0 Seattle, WA ( -0 Fax: ( - bruce@jjalaw.com Attorneys for Wapato Heritage, LLC 0 FOREMAN, APPEL, HOTCHKISS, ZIMMERMAN & /s/ Dale M. Foreman Dale M. Foreman, WSBA #0 P. O. Box Wenatchee, WA 0 (0-0 Fax: (0-0 dale@fahzlaw.com Attorneys for Wapato Heritage, LLC PAGE 0 (0-0 Fax (0-0

11 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 CERTIFICATE OF SERVICE I hereby certify that on the date set forth below, I caused the foregoing document, to be electronically filed with the Clerk of the above entitled Court using the CM/ECF system, which will send notification of such filing to the following: James M. Danielson: Brian C. Huber: Franklin L. Smith: Dana Cleveland: Pamela J. DeRusha: Rudy J. Verschoor: Joseph P. Derrig: Timothy M. Lawlor: Matthew A. Mensik: Jason D Avignon: jimd@jdsalaw.com brianh@jdsalaw.com frank@flyonsmith.com dana.cleveland@colvilletribes.com USAWAE.PDeRushaECF@usdoj.gov USAWAE.RVerschoorECF@usdoj.gov USAWAE.jderrigecf@usdoj.gov tml@witherspoonkelley.com mam@withspoonkelley.com Jason.davignon@colvilletribes.com and hereby certify that I have caused to be mailed by United States Postal Service the document to the following non-cm/ecf participants: Frances J. Reyes Enid T. (Pierre Marchand P.O. Box aka Enid T. Wippel Elmer City, WA -0 P.O. Box 0 Nespelem, WA Gary & Francis Reyes Linda Saint P.O. Box P.O. Box Newman Lake, WA 0 Omak, WA Jeffrey M. Condon Vivian Pierre P.O. Box P.O. Box Omak, WA - Elmer City, WA PAGE (0-0 Fax (0-0

12 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of 0 Arthur J. Dick Annie Wapato P.O. Box 00 Jones Rd. Nespelem, WA -0 Wapato, WA - Mary J. Garrison Francis Abraham P.O. Box 0 E. Empire Ave. Seattle, WA Spokane Valley, WA Sonia W. (Wapato Vanwoerkom Mike Palmer 0 th St. P.O. Box Lewiston, ID 0- Nespelem, WA Dwane Dick Hannah Rae Dick P.O. Box P.O. Box Nespelem, WA -0 Nespelem, WA -0 Kathleen M. Dick Lydia A. Armeecher P.O. Box P.O. Box Nespelem, WA -0 Wapato, WA Paul G. Wapato, Jr. Catherine L. Garrison Forest Estates Drive S. th St., Apt. Spokane, WA Tukwila, WA Leonard M. Wapato Judy Zunie P.O. Box P.O. Box White Swan, WA -0 Omak, WA Stephen T. Wapato Travis E. Dick N. Franklin Ave. Hannah Dick, Guardian Wenatchee, WA 0- P.O. Box Nespelem, WA -0 Jacqueline L. Wapato Deborah A. Blackwell P.O. Box SE Keegan Rd. Lapwai, ID 0-0 Eagle Creek, OR 0 PAGE (0-0 Fax (0-0

13 Case :0-cv-000-JLQ ECF No. 0 filed 0// PageID. Page of DATED this th day of July,. /s/ Dale M. Foreman Dale M. Foreman 0 PAGE (0-0 Fax (0-0