Murphy -vs- Hand

[The Navajo Nation refuses to honor a New Mexico district court decree because it did not have subject matter jurisdiction over Navajo Nation trust lands]

MELVINA MURPHY and EDWARD J. CLAH, Husband and Wife, Plaintiffs, No. CP-CV-1031-99

This is an action for the recognition of a foreign judgment, vacation of a homesite lease, declaratory judgment as to the valid holders of a homesite lease, and a mandatory injunction for the transfer of a homesite lease or, alternatively, issuance of a lease. The plaintiffs primarily rely upon an April 11, 1991 default judgment entered by the Eleventh Judicial District Court of McKinley County, New Mexico, which foreclosed on a mortgage on a Navajo Nation homesite lease and ordered the sale of the leasehold. The plaintiffs are purchasers of the leasehold from the U.S. Department of Veterans Affairs, which purchased it from the Government National Mortgage Association, the purchaser at a public auction held on August 22, 1991.

The petition for recognition in this case does not pray for notice and an opportunity to be heard by the defendants. The court will address comity recognition of the state judgment on its own motion, because there are defects in the Eleventh District Court’s subject matter jurisdiction which are apparent on the face of the state judgment. Those defects require this court to decline comity recognition of that judgment.

Vicki L. Hand is an enrolled member of the Navajo Nation and defendant Curtis Hand is a non-Indian. On July 14, 1981, Mr. and Mrs. Hand obtained a homesite lease from the Navajo Nation and the U.S. Department of Interior for a certain parcel of land the plaintiffs located at Iyanbito, in the New Mexico portion of the Navajo Nation. On November 29, 1983, the Hands obtained a loan from Gulf Coast Investment Company, and gave a promissory note for the loan which was secured by a mortgage on the homesite lease. The Hands defaulted on the loan, and the mortgagee sought and received a mortgage foreclosure default judgment on the homesite on April 11, 1991. The foreclosure action was in the Eleventh District Court in and for McKinley County, New Mexico.

Subsequently, the homesite lease was sold at a public auction on August 22, 1991, and the highest bidder was the Government National Mortgage Association. Apparently it transferred the homesite to the U.S. Department of Veterans Affairs, which in turn sold it to the plaintiffs under an installment contact for the sale of real estate. The plaintiffs took possession of the leasehold on July 21, 1993, and the defendants have not been in possession of that leasehold since at least that date.

Now, the plaintiffs wish to sell the leasehold, and they have found qualified buyers, but the remaining problem is a cloud on the title because defendant Vicki L. Hand claims she is still the rightful owner of the homesite lease and refuses to sign it over.[1]

The plaintiffs claim that the New Mexico court had jurisdiction over the mortgage foreclosure action, that the state judgment is final, and that it does not violate the public policies, customs or common law of the Navajo Nation. Unfortunately, the state judgment shows, on its face, that the New Mexico court did not have subject matter jurisdiction and that its default judgment does in fact violate the public policies, customs and common law of the Navajo Nation.

The law of the Navajo Nation for the recognition of foreign judgments is comity. That rule was originally stated by the former Navajo Nation Court of Appeals in the case of In re Guardianship of Chewiwi, 1 Navajo Rep. 120, 1 N.L.R. 37 (Nav. Ct. App. 1977). The court held that as a matter of Navajo Nation law, comity is the correct principle of recognition, and a “Navajo court will honor and enforce foreign judgments upon consideration of the right of the foreign court to issue the judgment, of the propriety of the proceeding, and of any relevant public policy of the Navajo Nation.” Id., 1 Navajo Rep. at 126, 1 N.L.R. at 39. See also, Anderson Petroleum Serv. Inc. v. Chuska Energy & Petroleum Co., 4 Navajo Rep. 187, 189, 4 N.L.R. 112, 113 (W.R. Dist. Ct. 1983). Therefore, upon the filing of a foreign judgment with a petition which contains an allegation that the foreign court had jurisdiction, this court must examine the foreign judgment on its face[2] to see if it in fact had jurisdiction.

This court does not have before it the return of service in the McKinley County action, so we do not know whether there was personal jurisdiction over the defendants. However, we do know that the land is within the Navajo Nation because of its description in the judgment as “A parcel of land situated within Land Management District No. 16 of Eastern Navajo Agency near Iyanbito, McKinley County, State of New Mexico....” The plaintiffs allege that this is a homesite lease, and such a lease is granted by the Resources Committee of the Navajo Nation Council, with the President of the Navajo Nation signing the lease with the approval of the Navajo Area Director (of the Bureau of Indian Affairs). See, 16 NNC Sec. 851 (1995), and generally Ch. 9, Tit. 16, Navajo Nation Code.

The action against the state defendants sought to terminate their interest in the homesite lease. That is an in rem action, and the State of New Mexico lacked jurisdiction over Navajo Nation land. The New Mexico Supreme Court declined jurisdiction in the case of Chino v. Chino, 90 N.M. 204, 561 P.2d 476 (1977). That was a wrongful entry and detainer action against a Mescalero Apache to evict him from a home within the Mescalero Apache Reservation. While the Court used the infringement test to decline jurisdiction, 561 P.2d 479, it could also have used the rule of in rem jurisdiction, because wrongful entry and detainer is a possessory action involving real property, and jurisdiction lies in the court where the land is located. In that case, it would have been the courts of the Mescalero Apache Tribe.

The principle of Indian nation primary jurisdiction was reinforced in an August 2, 1999 decision of the Ninth Circuit Court of Appeals in Owens Valley Indian Housing Authority v. Turner, No. 96-16021. The Indian housing authority sought brought an unlawful detainer action in federal district court because the California courts “refused” to assume jurisdiction and there was no tribal court. The district court dismissed the action for a lack of subject matter jurisdiction, and the Ningh Circuit Court of Appeals affirmed, holding that this was solely an internal matter and “The interests of tribal sovereignty will best served by the formation of tribal courts competent to hear such cases.” Id. Slip Op. at Par. 6.

In this case, the petition clearly has to do with possessory rights in Navajo Nation land, and only this court has in rem jurisdiction over it.

The Conroy case, supra, flows from the landmark decision in Williams v. Lee, 358 U.S. 217 (1959). Lee, who was a non-Indian trader operating a general store within the Navajo Nation, brought a debt action for goods sold on credit against Williams and his wife. Id. Lee brought suit in the Arizona Superior Court, and the defendants argued that the proper forum was the Navajo Nation courts. Id. at 218. Justice Black’s opinion established the “infringement test,” which is based upon a doctrine that “Essentially, absent governing Acts of Congress, the question has always been whether the state action infringed on the right of reservation Indians to make their own laws and be ruled by them.” Id. at 220 (citation omitted). Justice Black continued: “Congress has also acted consistently upon the assumption that the States have no power to regulate the affairs of Indians on a reservation.” Id. The Court then went on to reference the Navajo Nation-United States Treaty of 1868 to find that where the Navajo Reservation was “set apart” by the Treaty and no one, except for United States Government personnel, are to enter that area, “Implicit in these treaty terms ... was the understanding that the internal affairs of the Indians remained exclusively within the jurisdiction of whatever tribal government existed.” Id. at 221-222. That means “That 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 Indians to govern themselves.” Id. at 222.

In this particular case, the exercise of jurisdiction over Navajo Nation lands and over a Navajo and a non-Navajo defendant who appeared to be on those leased lands within the Navajo Nation infringed on the authority and jurisdiction of this court (which has jurisdiction over Iyanbito within this judicial district), and the New Mexico court had no jurisdiction.

The plaintiffs may object on the ground that this court had no subject matter jurisdiction for a mortgage foreclosure. That makes no difference. The New Mexico Supreme Court, in the Chino case above, found that it had no jurisdiction despite the fact that Mescalero Apache law did not provide for a wrongful entry and detainer action. Mortgage foreclosure is a common law and equity action, see, Dan B. Dobbs, Handbook on the Law of Remedies 38-40 (1973), and the Navajo Nation courts may apply general principles of state law or give remedies under New Mexico law. 7 NNC Sec. 204(C) (1995). This court has civil jurisdiction over the land in question, and thus it has the power to issue any writ or order necessary and proper to fully exercise that jurisdiction. 7 NNC Sec. 255.

The Gulf Coast Mortgage Company chose the wrong forum when it selected the Eleventh District Court of the State of New Mexico, and its judgment is null and void for a lack of jurisdiction. However, not all is lost for the plaintiffs.

The petition seeks four items of relief, and the lack of state jurisdiction negates only the first - the acceptance, recognition and enforcement of the state mortgage foreclosure judgment. The plaintiffs also seek (without saying it in so many words) a declaratory judgment that the homesite lease given to the defendants on July 14, 1981 is no longer valid and a further declaration that plaintiffs Murphy and Clah (who are Navajos) validly hold the lease. That is also a declaratory judgment issue. Finally, the plaintiffs seek an order to require Vicki L. and Curtis Hand to either transfer the homesite lease to the plaintiffs or for the court to issue a homesite lease to them.

The statutory provisions cited by the plaintiffs as to individual defaults, assignments and foreclosures on deeds of trust are largely inapplicable.[3] However, the answer lies in 7 NNC Sec. 253(B), which gives this court civil jurisdiction over any civil action where the defendant has caused an action to occur within the territorial jurisdiction of the Navajo Nation. See, Benally v. John, 3 Navajo Rep. 39, 44, 4 N.L.R. 22, 24 (Nav. Ct. App. 1983) (in personam jurisdiction to compel defendants to execute a deed). The court also has the general equitable authority to declare the rights of the plaintiffs and give effect to them in the event a defendant may fail or refuse to execute such a deed.

1. The court will not grant comity recognition to the April 11, 1991 default judgment in the cause of Government National Mortgage Association v. Curtis and Vicki L. Hand, No. CV-90-283, Eleventh Judicial District Court in and for the County of McKinley, State of New Mexico;

2. The plaintiffs shall file a substitute complaint or petition with this court in accordance with this opinion; and

3. The plaintiffs shall also file an appropriate summons or other form of process to bring the defendants or the land before the court.

[1] Although there is no allegation that Curtis Hand similarly refuses to sign over the lease, the petition seeks an order for him to do so.

[2] This examination is for defects in the judgment document which are obvious. Otherwise, a court may go behind the face of a foreign judgment where the defendants contend there was no personal jurisdiction over them. Unfortunately, state judgments often recite the fact or legal conclusion of jurisdiction when service of process was improper or the action arose within or affected the Navajo Nation.

[3] The plaintiffs recognize the flaw in the New Mexico court’s jurisdiction by their citation of 16 NNC Sec. 901 and 19 NNC Sec. 2008.