Troilo v. Big Sandy Band of West. Mono Indians

Filed 10/11/07 Troilo v. Big Sandy Band of West. Mono Indians CA5

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

APPEAL from an order of the Superior Court of Fresno County. Donald S. Black, Judge.

Wagner & Jones and Andrew B. Jones; Law Offices of John K. Ormond and John K. Ormond for Plaintiff and Appellant.

Holland & Knight, Jerome L. Levine, Rory E. Dilweg and Brian R. Guth for Defendant and Respondent.

This appeal concerns the interpretation of the term non-fixed assets in an employment agreement that was entered into by appellant, Michael Troilo, and respondent, Big Sandy Band of Western Mono Indians, a federally recognized Indian tribe (Tribe), when the Tribe hired Troilo as general manager of its Mono Wind Casino (Casino). The Tribe waived sovereign immunity for claims arising out of the employment relationship but limited the assets that could be executed against it to non-fixed assets of the Gaming/Hotel facility or the Tribes share of the profits from the Gaming/Hotel Facility.

After appellant received an arbitration award of $478,000 plus interest, attorney fees and costs in his wrongful termination action against the Tribe, he obtained a writ of execution. The writ directed the county sheriff to take custody of the proceeds of all sales and all types of gambling, as well as cash on the premises. The county sheriff entered the Casino and took over $169,000 in cash. The seizure of this money required the Tribe to shut the Casino down. Otherwise, the Tribe would have been in violation of federal regulations requiring that minimum cash reserves be maintained.

The Tribe moved for an order specifying the scope of enforcement of judgment. The Tribe argued that cash did not constitute a non-fixed asset under the employment agreement and therefore was not covered by the limited waiver of sovereign immunity. The trial court granted the motion and agreed with the Tribe that non-fixed assets did not include cash or funds. Rather, the court construed non-fixed assets to mean equipment and furnishings with an original purchase value less than $1,000.

Troilo contends that, construing the term non-fixed assets in its ordinary or popular sense, it must be concluded that non-fixed assets includes cash. According to Troilo, because cash is not a fixed asset, it must be a non-fixed asset.

Contrary to Troilos position, when the sovereign immunity waiver is construed as a whole and effect is given to the individual provisions, the trial courts conclusion that non-fixed assets does not include cash is correct. Accordingly, the order will be affirmed.

DISCUSSION

1. Standard of review.

In making its ruling, the trial court noted that the parties did not offer any competent evidence of the negotiations leading to the formation of the contract. Thus, no light was shed on the meaning ascribed by the parties to the term non-fixed assets. Rather, the court relied primarily on general rules of contract interpretation. Accordingly, we review the ruling de novo. (Cedars-SinaiMedicalCenter v. Shewry (2006) 137 Cal.App.4th 964, 980.)

The Tribe notes that conflicting definitions of the term non-fixed assets were proffered by the parties. Therefore, the Tribe argues, the appropriate standard of review is substantial evidence. The Tribe is correct that the court did consider these definitions. The court found that, although none of the definitions constituted recognized authority, the ones submitted by the Tribe originated from more reliable sources. Nevertheless, the fact that conflicting evidence was presented does not require the application of a substantial evidence standard of review. The extrinsic evidence consisted entirely of written declarations and thus the trial court was not required to assess a witnesss credibility. (Harustak v. Wilkins (2000) 84 Cal.App.4th 208, 213.)

2. The term non-fixed assets does not include cash held by the Casino.

Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers. (Santa Clara Pueblo v. Martinez (1978) 436 U.S. 49, 58.) Accordingly, an Indian tribe is subject to suit only where either Congress has authorized the suit or the tribe has waived its immunity. (Trudgeon v. Fantasy Springs Casino (1999) 71 Cal.App.4th 632, 636.) However, a waiver of sovereign immunity cannot be implied. (Santa Clara Pueblo v. Martinez, supra, 436 U.S. at p. 58.) Rather, a tribes waiver must be unequivocal and express. (Ibid.) Moreover, sovereign immunity waivers are construed narrowly and strictly. (Metropolitan Water Dist. of Southern Cal. v. U.S. (9th Cir. 1987) 830 F.2d 139, 143.)

Here, the Tribe expressly waived its immunity from suit for any claims by Employee arising out of this Employment Agreement but also set specific limits on this waiver. Regarding the enforcement of a money damages award, the waiver provides that the court shall have no authority or jurisdiction to execute against any assets of the Tribe except (i) non-fixed assets of the Gaming/Hotel facility or (ii) the Tribes share of the profits from the Gaming/Hotel Facility. The waiver further provides that the appropriate court shall have the authority to issue an order requiring the Parties to pay over any income or profits subject to attachment, pursuant to the Employment Agreement .

The issue is whether, under the terms of the sovereign immunity waiver, all of the cash at the Casino was subject to attachment as a non-fixed asset. Troilo contends that the ordinary and popular meaning of non-fixed asset is any asset that is not a fixed asset. Fixed assets are, generally speaking, those assets that are of a permanent or long-term nature and cannot be readily converted into cash. Therefore, Troilo argues, the term non-fixed asset must include cash. In contrast, the Tribe argues that, under both the principle that sovereign immunity waivers must be strictly and narrowly construed and the general rules of contract construction, the trial court correctly concluded that the term non-fixed assets did not include cash.

The fundamental goal of contract interpretation is to give effect to the parties mutual intent. (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) When a contract is reduced to writing, this intent is determined from the writing alone, if possible. (Cedars-Sinai Medical Center v. Shewry, supra, 137 Cal.App.4th at p. 979.) Judicial interpretation is controlled by the clear and explicit meaning of the contract provisions, interpreted in their ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage. (Santisas v. Goodin (1998) 17 Cal.4th 599, 608.) The contract must be construed as a whole, with the various individual provisions interpreted together so as to give effect to all, if reasonably possible or practicable. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 473.) Moreover, the contract must be interpreted to be lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties. (Civ. Code,  1643.)

Here, the parties did not present competent evidence of the negotiations that led to the formation of the contract. Accordingly, there was no evidence on the meaning ascribed by the parties to the term non-fixed assets. The evidence that was offered by the parties consisted of a few conflicting definitions of non-fixed assets from unpersuasive sources. Thus, it appears that non-fixed assets does not have either an ordinary and popular or generally recognized technical meaning. Under these circumstances, it is most appropriate to rely on the general principles of contract interpretation in resolving this dispute.

As noted above, the sovereign immunity waiver limits assets that can be executed upon to non-fixed assets or the Tribes share of the profits. However, under federal law, the Tribe is required to maintain a readily accessible cash reserve in an amount sufficient to satisfy obligations to the gaming operations customers as they are incurred. (Indians, 25 C.F.R.  542.14(d)(3) (2007).) Thus, if the term non-fixed assets is interpreted to include all cash on the premises and if that cash is seized pursuant to a writ of execution, the Casino is forced to either close or operate in violation of law. It is not reasonable to hold that this was the Tribes intent when it agreed to permit Troilo to execute upon the Casinos non-fixed assets. A contract must be interpreted to be reasonable and lawful. (Civ. Code,  1643.) The interpretation urged by Troilo is neither.

Finally, sovereign immunity waivers must be construed narrowly and strictly. (Metropolitan Water Dist. of Southern Cal. v. U.S., supra, 830 F.2d at p. 143.) Interpreting non-fixed assets to exclude cash complies with this requirement.

In sum, construing non-fixed assets as excluding cash ensures a lawful and reasonable interpretation of the sovereign immunity waiver.

DISPOSITION

The order is affirmed. Costs on appeal are awarded to respondent.

_________________________

Levy, J.

WE CONCUR:

_______________________________

Vartabedian, Acting P.J.

_______________________________

Gomes, J.

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