Opinion ID: 1429367
Heading Depth: 3
Heading Rank: 3

Heading: Does Section 410 Apply to the Proceeds of the Condemnation Case?

Text: We answer this question in the affirmative for the reasons expressed by the superior court. [4] Section 410 is designed to exempt certain Indian property from liability for the payment of certain debts. In Matter of City of Nome, 780 P.2d 363, 367 (Alaska 1989), we noted that a federal statute designed to protect from creditors certain categories of Indian property should be construed broadly: ambiguities must be resolved in favor of the Indians. Id. An award of compensation for land which is forcibly conveyed in a condemnation action can readily be categorized as money accruing from a sale of the land in question. As Judge Cardozo put it, `Condemnation' is an enforced sale, and the state stands toward the owner as buyer toward seller. On that basis the rights and duties of each must be determined. Jackson v. State, 213 N.Y. 34, 106 N.E. 758, 758 (1914); see also, United States v. 27,223.21 Acres of Land, 589 F. Supp. 1121, 1124 (D.Colo. 1984); Herskovitz v. Vespico, 238 Pa.Super. 529, 362 A.2d 394, 397 (1976). Similarly, damages for the precondemnation use of land are analogous to lease proceeds. The court in the condemnation case calculated damages for the precondemnation use of Tabbytite's land based on its fair rental value: The fair rental value of the road, from the time the City began its occupancy, to the time the City condemned the road, was $13,000. This compensates Ms. Tabbytite for the fair market value of the City's use during the time that the City did not pay rent for the land upon which the road was built. This is the rent value of the bare land, not including the improvement. The City had the advantage of the improved road, which had been conferred as an unwanted benefit by Clarke onto Tabbytite's land, for nineteen years, from 1961 to 1980. The fair rental value of the bare land during this time must be increased by the rental value of the improvement. I find that a fair measure, roughly in accord with market values, for a lease of the improvement subject to maintenance by the Municipality as tenant, would be 7% per year of what it cost to build the road, $60,000, times 19 years, for a rent on the improvement of $79,800. This is for rent value of the improvement, independently of the rent value of the bare land. (Emphasis added.) Just as Tabbytite can be said to have involuntarily sold a portion of her land and received proceeds for the sale in the condemnation action, it is reasonable to conclude that the use of the same land prior to the formal condemnation action was an involuntary leasing and the damages for that use were lease accruals. Vitale argues that trespass damages are not the equivalent of proceeds from a forced lease. He points out that damages for trespass may include amounts for emotional distress suffered by the owner and for physical harm to the land and that such amounts would not take on the character of lease proceeds. We need not decide whether trespass damages are equivalent to lease proceeds in every case. In this case there is no doubt that the entire amount of the damage award for trespass was based on the precondemnation use of the land measured by its rental value. The award thus had the character of lease proceeds. See Restatement (Second) of Torts § 931 cmt. b & illus. 1 (1979). We conclude, for the above reasons, that all of the proceeds from the condemnation action reasonably can be considered to have accrued from the lease or sale of allotment lands. The proceeds thus fall within the protection of section 410. [5] Vitale contends that, even if the proceeds here are protected by section 410, attorney's fees arising from work performed to protect allotment rights are excepted from the section's bar. As support for this position he cites Arenas v. Preston, 181 F.2d 62 (9th Cir.), cert. denied, 340 U.S. 819, 71 S.Ct. 50, 95 L.Ed. 602 (1950). In Arenas, the Ninth Circuit allowed an attorney's lien to be placed on an Indian allotment despite the inalienability of that land. Id. at 66-67. In doing so the court reasoned that such a course of action would, in effect, serve the congressional purpose of affording extra protection to Native allotments. Id. at 66. That is, without the services of the attorney the Indian would not have received his allotment at all. Id. Vitale urges this court to apply this same doctrine to proceeds protected by section 410. While the matter is not free from doubt, we think that Arenas is not controlling. Section 410 is neither mentioned nor discussed in the Arenas opinion. Given that section 410 applies, we are not free to decide this case based on the rationale underlying Arenas, because that rationale conflicts with the explicit command of the statute. [6]