Court Opinion

ID: 7215185
Source: CourtListenerOpinion
Date Created: 2022-07-25 00:45:18.277387+00
Date Added: 2024-06-11T16:16:59.346943
License: Public Domain

MEMORANDUM*
Norton Sound Health Corporation (“Norton Sound”), a consortium of 20 Alas*836ka Native Villages in the Bering Strait region, appeals from the district court’s grant of summary judgment in favor of the Secretary of Health and Human Services and the Director of the Indian Health Service (collectively the “IHS”). Because we find that there are genuine issues of material fact in dispute, we reverse.
I.
Because the parties are familiar with the facts of this case, we discuss them only as necessary to explain our decision. Congress sought to encourage Indian tribes to take over the provision of health care services for their people. See 25 U.S.C. §§ 450, 450a; 25 C.F.R. § 900.3. Congress also required the IHS to reimburse tribes and tribal organizations for the cost of administrative services associated with providing health care services. See 25 U.S.C. § 450f(a)(l). The IHS created and maintained three “pools” of funds to reimburse different contract support costs: One pool, called the Indian Self-Determination (“ISD”) fund, was for administrative costs associated with new and expanded health service contracts. See IHS Circular No. 96-04, at 9.
The IHS and Norton Sound reached an agreement for Norton Sound to provide health care for twenty Alaska native villages. But, for whatever reasons, they disagreed about the amount of money Norton Sound should receive to cover the initial administrative costs associated with providing health care services. After considerable negotiation, the IHS and Norton Sound entered into a settlement agreement: $349,612 was due Norton Sound, and Norton Sound agreed to take a place in the “queue” to be paid from the ISD fund as money became available.1 This agreement was recognized and reaffirmed in annual funding agreements (“AFA”) in 1997,1998, and 1999.
By 1999, Norton Sound was close to the head of the “queue.” But, suddenly, circumstances changed: for fiscal year 1999, Congress did not segregate a specific amount of its lump-sum appropriation for health care to be allocated for ISD-funded contract support costs, but instead increased the lump sum it appropriated to cover contract administration costs by $35 million.2 The IHS, however, claimed that it only owed Norton Sound $75,031 instead of $349,612, and informed the consortium that this debt would not be paid in 1999. The IHS instead decided to spread the additional $35 million that Congress appropriated among the organizations in the ISD queue to bring the level of reimbursement to a standard and uniform rate of 80.42% of requests.
II.
We find that on the evidence presented, Norton Sound raised triable issues with regard to (1) whether its claim in 1999 was conditioned on specific congressional appropriations to the ISD fund; and (2) whether the IHS in fact allocated part of the increased lump-sum appropriation to the ISD fund in 1999.

A. The 1999 Annual Funding Agreement Is Ambiguous

We turn first to the question of whether the 1999 AFA conditioned Norton Sound’s claim on specific congressional appropriations to the ISD find. Our stan*837dard of review requires us to decide whether the 1999 AFA is clear and unambiguous. We hold it is not. “[T]he determination of whether contract language is ambiguous is a question of law.” O’Neill v. United States, 50 F.3d 677, 682 (9th Cir.1995). If a contract is ambiguous, its interpretation presents a mixed question of law and fact. Libby, McNeill & Libby v. City Nat’l Bank, 592 F.2d 504, 512 (9th Cir.1978); see also Dale v. Preg, 204 F.2d 434, 435 (9th Cir.1953) (if a contract is ambiguous, its meaning is a question of fact as to which extrinsic evidence can be received in aid of its interpretation). Thus, summary judgment is proper in a contract case only if the contract or the contract provision in question is unambiguous. Castaneda v. Dura-Vent Corp., 648 F.2d 612, 619 (9th Cir.1981).
The 1999 AFA between the IHS and Norton Sound provided, in pertinent part, as follows:
Indirect/Contract Support. Pursuant to section 106(a)(2) of the Indian Self-Determination Act, NSHC [Norton Sound] shall receive contract support as defined in sections 106(a)(2) and (3). As stated in section 106(a)(2) NSHC shall receive contract support only for costs that are not normally carried out by the Secretary in her direct operation of the program or are provided by the Secretary in support of the contracted program from resources other than those under compact. The amount for contract support due from the Indian Self Determination Fund for FY [fiscal year] ’96 and for FY ’97 is $349,612. The parties acknowledge that the IHS intends to pay contract support costs according to IHS Circular 96-4. Nothing in this provision shall be interpreted to waive NSHC’s right to be paid the contract support costs to which it is entitled in accordance with section 106(a)(2) of the Indian Self-Determination and Education Assistance Act.
In addition, a footnote to the financial summary of the agreement that was appended to the AFA states “Line 25 — subject to ISD appropriations.” Although fine 25 specifically addresses catastrophic health care costs, it also may be read to address line 26 of the financial summary that indicates that $349,612 is due Norton Sound for contract support costs.
The IHS urges that we read this provision to mean that payment to Norton Sound was conditioned on Congress’s appropriating a specific amount to the ISD fund for fiscal year 1999. The word “fund,” however, nowhere appears in the footnote, and there is no other indication in the contract that the parties definitively intended to condition Norton Sound’s right to recovery so narrowly. While the IHS’s reading of the footnote is plausible, it is not textually compelled, and another plausible meaning of the footnote is that payment of the $349,612 was contingent on Congress’s appropriating funds that could be used for ISD purposes. Thus, we conclude that the meaning of the provision is unclear and ambiguous. See Castaneda, 648 F.2d at 619 (provision of a contract is ambiguous if it is reasonably susceptible of more than one construction or interpretation). This ambiguity, in turn, creates a question of fact as to the parties’ intent, and summary judgment is inappropriate.
In addition, even if it were proper to read the footnote to make Norton Sound’s right to payment in 1999 contingent on congressional appropriations for the ISD fund, summary judgment still would be improper because Norton Sound has adduced evidence that, when viewed in the light most favorable to it, indicates that Congress made “an ISD appropriation” for 1999. The appropriation bill for the relevant period provides:
*838Provided further, That, notwithstanding any other provision of. law, of the amounts provided herein, not to exceed $203,781,000 shall be for payments to tribes and tribal organizations for contract or grant support costs associated with contracts, grants, self-governance compacts or annual funding agreements between the Indian Health Service and a tribe or tribal organization pursuant to the Indian Self-Determination Act of 1975, as amended, prior to or during fiscal year 1999.
Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub.L. No. 105-277, § 152 (1998). That is, Congress appropriated $203,781,000 including an extra $35 million, to be used to reimburse organizations such as Norton Sound for their contract support costs. These costs included — as specified by the Indian Self-Determination Act — costs as-soeiated with taking over the administration of health care services.
Congress’s failure to specify that part of the appropriation was to be directed to the ISD fund itself, on summary judgment, as a matter of law cannot be read to have extinguished that fund in 1999.3

B. Allocation of Money to the ISD Fund

We turn next to the question of whether the IHS in fact allocated part of the increased lump-sum appropriation to the ISD fund in 1999. The issue is not whether the IHS used a distribution method in 1999 that differed from the “queue” system that it had used in earlier years, but whether money that was used to reimburse contract support costs was' ISD money.
Norton Sound presented evidence that would allow a trier of fact to find that the IHS distributed the funds as ISD money. The IHS’s distribution sheets indicate that *839funds were distributed to tribes and tribal organizations for the uses defined by the “pools” of money for contract support costs. The IHS’s contract support cost data report for 1999 consistently adopted the terminology of ISD funds and distinguished between tribes in the ISD fund queue and others.
The IHS urges us to conclude that all of the agency’s specific references to “Indian Self-Determination Funds” merely were meant to differentiate the tribes that were in the ISD queue from those that were not. At summary judgment, however, any ambiguity in the meaning of the sheets must be resolved in favor of Norton Sound and against the IHS.
III.
In sum, we hold that the district court committed reversible error when it determined that there were no genuine issues of material fact in dispute and that summary judgment in favor of the IHS was proper. We reverse the entry of judgment in favor of the IHS and remand to the district court for trial.
REVERSED and REMANDED

 This disposition is not appropriate for publication and may not be cited to or by the courts *836of this circuit except as provided by Ninth Circuit Rule 36-3.

. The queue system was mandated by IHS Circular No. 96-04.

. During the entire fiscal year 1999, the allocation of this increase was governed by IHS Circular No. 96-04's pooling system.

. The dissent's implication that Congress compelled the IHS in 1999 to abandon the methodology for distributing ISD funds delineated by IHS Circular No. 96-04 is mistaken. Congress clearly indicated that it declined to mandate any changes to the IHS contract support cost distribution system for fiscal year 1999, but awaited the Administration's proposals for changes to the system for fiscal year 2000. The House and Senate Conference Committee stated:
The conference agreement does not include statutory language mandating a pro-rata [sic] distribution of contract support costs across all Service self-determination contracts and self-governance compacts. This language was included in both the House and Senate bills but has been dropped because of concerns expressed by tribal organizations and many individual tribes. The Committees remain convinced that the current distribution methodology employed by the Service for contract support costs is inequitable and fiscally unsound. The Committees’ proposal for a pro-rata distribution, in combination with a one-year moratorium on new contacts and compacts and additional funding for exist-mg contracts and compacts, would have provided a permanent solution to the problem.
The Committees have added more than $35 million to the Administration's budget request to address the inequity in the distribution of contract support cost funding in fiscal year 1999. The Committees direct the Service, in cooperation with the tribes, to remedy this inequity in the fiscal year 2000 budget request. The remedy cannot be a large infusion of additional funding for contract support costs at the expense of either critical health programs or critical construction needs of the Service. Further, the Committees note that the one-year moratorium on new contracts and compacts cannot be extended indefinitely. The Committees believe strongly that an acceptable permanent solution to the contract support cost distribution inequity must be a part of the fiscal year 2000 budget request from the Administration.
Conference Report on H.R. 4328, Making Omnibus Consolidated and Emergency Supplemental Appropriations for Fiscal Year 1999, 144 Cong. Rec. H11044, H11382 (daily ed. Oct. 19, 1998).