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Tribe Member Knew Of Flaws In Trust Land Leases, Court Told

By Jack Newsham

Law360, New York (March 3, 2016, 7:17 PM ET) — A group of Nevada homeowners being sued by a Native American man who says they illegally built their homes on his trust land asked a Nevada federal judge Tuesday to keep their counterclaims alive, saying Leon Mark Kizer took payments and signed off on leases he knew might be illegal.

More than 180 people asked U.S. District Judge Robert C. Jones to let their counterclaims against Kizer move forward, saying he unjustly profited from payments from them and PTP Inc., the developer of their subdivision, while failing to disclose communications with the Bureau of Indian Affairs and the Washoe Tribe of Nevada and California that suggested PTP’s 99-year master lease on Kizer’s land is illegal. The homeowners sublet their plots from PTP and have poured millions of dollars into building their homes there.

Kizer is seeking a declaratory judgment that PTP’s lease and all the subleases are invalid because the law only allows 25-year leases for Native American land. He has argued that the subletters’ beef lies with PTP and their title insurers, which are sophisticated companies and have profited much more than he did from the development of the Pine View Estates subdivision. Kizer has said he didn’t have an attorney when he signed off on the master lease or the subleases and said homeowners should have looked into the matter themselves.

But the homeowners, which seek unspecified damages in their counterclaims, blasted those arguments on Thursday, saying what Kizer called black-letter law that makes the master lease invalid is actually “hotly contested.”

“Kizer[] argues that counterclaimants’ reliance on his misrepresentations about the master lease’s validity was not justified because counterclaimants supposedly could have determined from publicly available information that the master lease was not valid,” the opposition said. “This argument is nonsense.”

The homeowners, who are being sued by Kizer along with their association, PTP and the BIA, also said two cases cited by Kizer to argue that federal policy barred their claims — Narragansett Indian Tribe v. RIBO Inc. and Heckman v. United States — actually support their argument. Both of those cases acknowledged a Native American could be held liable for luring people into signing void contracts and damaging them as a result, as the homeowners allege Kizer did in the nearly two decades that elapsed between when he leased his land to PTP and when he filed suit.

Jerome Miranowski, an attorney for Kizer, told Law360 his client didn’t learn about questions to the validity of the leases until 2008 or later, not 2006 as the homeowners allege, and he said the BIA alerted the homeowners to concerns shortly thereafter, in 2010.

A smaller group of subletters asserted counterclaims against Kizer in January.

According to his complaint, Kizer entered into a master lease with PTP for his land in 1997 that was approved by a BIA official. The complaint claimed that the BIA indicated to then-Washoe tribal chairman Brian Wallace in 2006 that both the length of the 99-year lease and the purchase option violated federal law.

Leases on Indian trust land for business purposes can’t exceed 25 years, or 50 with an extension, and non-Indians can only buy trust land at fair market value and with BIA approval, the complaint said.

Lawyers for the homeowners didn’t reply to a request for comment.

Kizer is represented by Aaron J. Harkins and Jerome A. Miranowski of Faegre Baker Daniels and Douglas R. Brown of Lemons Grundy & Eisenberg.

The homeowners are represented by Scott E. Gizer, Eric P. Early and Diane M. Luczon of Early Sullivan Wright Gizer & McRae LLP.

The case is Kizer v. PTP et al., case number 3:15-cv-00120, in the U.S. District Court for the District of Nevada.