Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-00474/USCOURTS-azd-2_08-cv-00474-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgment

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Water Wheel Camp Recreational Area,

Inc.; Robert Johnson, 

Plaintiffs, 

vs.

The Honorable Gary LaRance; 

Jolene Marshall, 

Defendants. 

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No. CV-08-0474-PHX-DGC

ORDER

In considering the merits of this action, the Court has concluded that the parties should

be afforded an opportunity to brief a few issues not addressed in the briefing to date. 

1. Plaintiffs contend that paragraph 21 of the lease grants the Secretary of the

Interior the exclusive right to bring legal actions arising out of the lease. Paragraph 21,

however, authorizes the Secretary to “enforce” the terms of the lease. Dkt. #1-2 at 38-39.

The action pending in Tribal Court seeks to hold Plaintiffs liable for breach of the rent

provisions of the lease, but it also seeks to do more – to evict Defendants for wrongful

possession of the property and to impose on them damages for tortious conduct. Even if the

Secretary is designated by paragraph 21 as the sole enforcer of the lease terms, one might

reasonably ask whether this includes actions for eviction or tortious conduct – actions not

necessarily predicated on breach of the lease terms. Stated differently, did the parties to the

lease intend to limit the Secretary’s enforcement powers to breaches of the lease, or did they

Case 2:08-cv-00474-DGC Document 75 Filed 08/06/09 Page 1 of 4
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 The Court recognizes that holding over is itself a breach of the lease (see lease ¶29),

but it arguably is more – it is unlawful detainer. Does paragraph 21 preclude the tribe from

bringing an action for unlawful detainer or tort that is not predicated on breach of the lease?

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intend more broadly to designate the Secretary as the sole individual authorized to bring legal

actions arising out of the lease relationship?1

2. At oral argument, Defendants asserted that even if paragraph 21 of the lease

is read to provide that only the Secretary of the Interior may bring an action arising from the

lease, the lease expired in July of 2007 and no longer binds the tribe. Defendants argued that

the Tribal Court action was commenced in late 2007 – after the lease and paragraph 21 had

expired – and that paragraph 21 therefore does not limit the Tribal Court’s jurisdiction. This

view was adopted by the CRIT Court of Appeals in this case. See Dkt. #46-2 at 35.

Defendants and the Court of Appeals cite no legal authority for this position.

The Restatement (Second) of the Law of Property provides that “the legal

relationships of the landlord and tenant during the period in which the tenant improperly

holds over after the termination of the lease are the same as during the period of the lease,

except to the extent a modification of the legal position of one or the other is required by the

circumstances of the holding over.” Restatement (Second) of Property (Landlord and

Tenant) § 14.7 (1977). A comment to section 14.7 explains the rationale: “[To] recognize

and preserve a continuity of expectations of rights and duties during the holdover period,

disputes over issues not otherwise covered in §§ 14.2-14.6 are justifiably governed by the

incidents of the previous tenancy, including those determined by law as well as those

determined by contract.” Id. at cmt. a. 

The Court has found no case where a court declined to apply a forum selection,

arbitration, or choice of law provision because the lease had terminated and a tenant was

unlawfully holding over. To the contrary, cases generally conclude that a holdover tenancy

is governed by the terms of the lease. See, e.g., Small v. Durango Partners, LLC, 930 A.2d

297, 301-02 (Me. 2007) (terms of lease and not common law terms apply during holdover

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tenancy); Hinton v. Sealander Brokerage Co., 917 A.2d 95, 110 n.31 (D.C. 2007) (specific

lease provisions will govern damages during the holdover period); Imperial Colliery Co. v.

Cities Serv. Oil & Gas Corp., 998 F.2d 1009 (4th Cir. 1993) (unpublished opinion) (holdover

tenant permitted to remove oil from land under same conditions permitted by lease); State

v. Kemalian Realty, Inc., 705 A.2d 999, 999-1000 (R.I. 1997) (arbitration provision of lease

applied during holdover tenancy); Watson Enter., Inc. v. Greenwich Cadillac-Oldsmobile,

Inc., No. 30243, 2004 WL 2361601, at *1-*3 (Conn. Super. Ct. 2004) (applying arbitration

clause during period of holdover tenancy). The Court has found one lease term – an option

to purchase – where courts differ on whether the term applies during a holdover period.

Compare Wanous v. Balaco, 107 N.E.2d 791, 793 (Ill. 1952) (holding an option to purchase

was not part of the holdover tenancy), and Barnes v. Jackson, No. Civ.A. 1061-K, 2005 WL

2130220, at *4 & n.22, n.23 (Del. Ch. 2005) (unpublished) (addressing numerous cases

which have held that a tenant’s option to purchase does not survive into a holdover tenancy

period), with Peter-Michael v. Sea Shell Assoc., 709 A.2d 558, 563 (Conn. 1998) (holding

that holdover plaintiff’s allegations that defendants failed to provide it with a right of first

refusal contained in the lease states a legally sufficient cause of action), and Concrete

Accessories Co. v. Moses, 95 P.3d 648, 653-54 (Kan. Ct. App. 2004) (holding that the option

to purchase carried over into the renewal period). The Court has found virtually no

explanation of the final sentence of section 14.7 – that lease provisions apply “except to the

extent a modification of the legal position of one or the other is required by the circumstances

of the holding over.”

The Court requests that the parties address the specific question of whether the terms

of the lease, particularly paragraph 21, continue to bind the parties after the lease’s July 2007

expiration. A related question is whether the first sentence of paragraph 23 should be read

to mean that paragraph 21 and other lease terms do not apply beyond the end of the lease.

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Each side should file a single memorandum, no longer than 10 pages, addressing all

of the issues identified in this order. The memoranda should be filed simultaneously by the

close of business on Friday, August 21, 2009.

DATED this 6th day of August, 2009.

Case 2:08-cv-00474-DGC Document 75 Filed 08/06/09 Page 4 of 4