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Cite as: 2004 WL 1304044 (Cal.App. 1 Dist.))

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Court of Appeal, First District, Division 4, California.


In re the TRUSTEESHIP OF THE PINOLEVILLE INDIANS.

Leona Williams, Plaintiff and Respondent,

v.

Priscilla Hunter et al., Defendants and Appellants.


No. A099189.

(Mendocino County Super. Ct. No. CV05220).


June 14, 2004.


Michael Arthur Robinson, Monteau & Peebles LLP, Sacramento, CA, for Plaintiff-Respondent.


Edward William Swanson, Swanson & McNamara LLP, San Francisco, CA, for Defendant-Appellant.


Nancy Bridget Thorington, Santa Rosa, CA, for Amicus curiae for real party in interest.



REARDON, J.


*1 After more than a century of court supervision, the trial court ordered dissolution of the "Trusteeship of the Pinoleville Indians" (Trust), along with distribution of all Trust assets. The primary asset is a 59-acre parcel of property near Ukiah, Mendocino County. It is adjacent to the Pinoleville Rancheria (Rancheria), an approximately 100-acre parcel acquired by the federal government for the federally recognized Pinoleville Band of Pomo Indians (Pinoleville Band).


Appellants are Priscilla Hunter, chairperson of the Coyote Valley Band of Pomo Indians (Coyote Valley Band) and other members of that tribe who are also identified beneficiaries of the Trust. They challenge that aspect of the distribution plan which directs the trustees to negotiate with the Pinoleville Band for the sale of the residual parcel [FN1]--a conveyance that would result in the merger of the Trust property with the adjacent Rancheria. We conclude that the distribution plan comports with the requirements of Probate Code [FN2] section 15410, subdivision (c), and therefore the trial court did not abuse its discretion in directing distribution as it did.


FN1. The residual parcel is the 28.5-acre parcel remaining after carving out sites for existing residences and cemetery plots.


FN2. Unless otherwise indicated, all further statutory references are to the Probate Code.

Section 15410 provides for various dispositions, upon termination of a trust, including disposing of trust property "in a manner directed by the court that conforms as nearly as possible to the intention of the settlor as expressed in the trust instrument." ( Id. at subd. (c).)


I. FACTUAL BACKGROUND

A. Early History


In 1850 the California Legislature passed the Act for the Government and Protection of Indians providing, among other matters, that "any indian able to work and support himself in some honest calling" who is "found loitering and strolling about" could be arrested and, if found "vagrant" could be "hired out" to the highest bidder for up to four months. (Compiled Laws of California, 1850-1853, Ch. CL, § 20, p. 825.) Reported oral history holds that in the mid- 1800's, many California Pomo Indians were rounded up by "white" immigrants and incarcerated or enslaved. Later in the century many escaped or were released, to find that their lands were then owned by "white" settlors. Native Americans were not declared citizens of the United States until 1924. (Act of June 2, 1924, ch. 233, 43 Stats. 253.)


In the late 19th century, a group of Native Americans living around Ukiah, Mendocino County, purchased several tracts of land. The first transaction occurred in 1879, with the deeding of approximately 51 1/2 acres of land to Captain Jack, Charley Hale and Sam Hale, identified as "Indians." In 1893, an exchange of land took place. Captain Jack and Sam Hale, identified as "surviving Trustees of the Indians heretofore [and] now living in Pinoleville," conveyed the 51 1/2 acres to Elizabeth Reed. Israel (I.C.) and Elizabeth Reed, in turn, conveyed property near the Ackerman Creek in Mendocino County to "Sam Hale[,] Napoleon Bonaparte[,] Jim Reeve[,] Fuller Williams and Jack Mace (indians) and trustees of the [Pinoleville] Indians near Ukiah." The instrument recited that the grantees were "[t]o have and to hold [the premises] unto [themselves], their heirs and assigns forever as such trustees of said Pinoleville Indians. " (Italics denote handwritten words.)


*2 Several years later, in 1897, the Reeds sold approximately two more acres to Napoleon Bonaparte, Sam Hale, Jim Reeve, Jack "Maze [ sic ]" and John Stevenson.


Court proceedings concerning the Trust first opened in 1899, when the original trustees resigned and petitioned for appointment of three non-Native American trustees, who were so appointed. In 1934, the above trustees having died, upon petition the court appointed new, Native American trustees.


B. Federal Recognition Status


In 1911 the federal government first recognized the existence of a tribal entity, now known as the Pinoleville Band, with the establishment of the Rancheria immediately east and contiguous to the Trust property. Reported oral history holds that when the Rancheria opened, many living on Trust land moved next door to the Rancheria, but others stayed in order to remain independent of the reservation system.


California rancherias are small Indian reservations or communities, comprised of lands purchased in the early years of the 20th century pursuant to a federal program that was prompted by the findings of an inquiry into conditions of California Indians. ( Duncan v. United States (Ct.Cl.1981) 667 F.2d 36, 38.) An investigator commissioned by the federal government found that "Indians had been forced from agriculturally productive lands and were then living on worthless lands in distressing conditions." ( Duncan v. Andrus (N.D.Cal.1977) 517 F.Supp. 1, 2.)


In 1958 Congress enacted legislation [FN3] authorizing termination of federal supervision over, and distribution of the assets of, various rancherias, upon approval of the majority of affected Native Americans voting in a referendum. (Rancheria Act, §§ 1, 2.) Under the Rancheria Act, termination of a rancheria ended rights of the Native Americans to receive special federal services as Native Americans, and exposed rancheria lands to state tax liability and regulation. ( Id. at § 10(b), as amended by Pub. Law No. 88- 419 (Aug. 11, 1964) 78 Stats. 390, 391; see Rancheria Act § 2(d).)


FN3. Public Law No. 85-671 (Aug. 18, 1958) 72 Statutes 619 (the Rancheria Act).


The Rancheria apparently was terminated in 1966 pursuant to the provisions of the Rancheria Act. The Pinoleville Band's federal status was reinstated in 1983 with entry of a stipulated judgment restoring federal recognition of numerous Northern California tribes. (See Hardwick v. United States (N.D. Cal., Dec. 22, 1994, No. 79-1710 SW) 1994 WL 721578.)


C. Ascertaining Trust Beneficiaries; Governance Issues


In 1956 trustees of "the Pinoleville Indians" petitioned for determination of Trust beneficiaries. The judgment provided that the beneficiaries "are the Pinoleville Indians who from time immemorial have constituted a tribe of Indians and that the conveyance of said real property was made for the use and benefit of members of said tribe." The court further explained that the property was conveyed to the original trustees "for the benefit of the Pinoleville Indians and that by said designation of 'Pinoleville Indians' the original grantors meant and intended the Pinoleville tribe of Indians and that it was intended that said land should be held in trust for the said Pinoleville tribe of Indians in perpetuity." The court ordered that the 54 beneficiaries listed in the judgment were the sole and only beneficiaries.


*3 Six beneficiaries were added in 1976, and three years later the court again designated current beneficiaries, confirming a list of 494 and ruling that "[a] beneficiary must be related by blood to the original beneficiaries of the land trust established in 1893."


In 1979 the court directed a referee to prepare a proposal for the government and operating procedures for the "Trusteeship of the Pinoleville Indians." Bylaws were debated and confirmed in 1980, and thereafter new trustees were elected pursuant to the bylaws.1980 also saw additional efforts to determine present beneficiaries.


D. Recent Procedural History


Respondent Leona Williams, Chairperson of the Pinoleville Band, petitioned in pro. per. for review and modification of the terms of the Trust in 1996. She sought (1) a determination that the beneficiaries of the original transfer are the enrolled members of the Pinoleville Band; (2) an order dissolving the trust and distributing the property to the tribe; (3) in the alternative, an order modifying the trust agreement and substituting the Pinoleville Tribal Council for the board of trustees; (4) an accounting; and (5) further relief as just and proper.


Some beneficiaries opposed the petition. Objectors also moved to dismiss for lack of subject matter jurisdiction. Ruling on the motion to dismiss, the court struck Williams's first and second prayers for relief and retained jurisdiction to decide the remaining matters. The parties stipulated to appointment of two interim trustees: Charles Mitchell, a member of the Coyote Valley Band, and Joseph Myers of the Pinoleville Band.


The court set a hearing for September 1, 2000, on the petition to dissolve the Trust and requested proposals from the parties for disposition of Trust property. Williams and interim trustee Myers submitted proposals.


The matter was reset for November 3, 2000. Williams was late and her counsel failed to appear. The court deemed the petition abandoned. Williams moved to set aside that ruling. The court reaffirmed its prior ruling striking the first two prayers for relief, denied the third prayer to substitute the tribal council as trustees and retained power to require accounting.


E. Trust Dissolution Proceedings


Meanwhile, in view of recurring disputes, periodic and unending litigation, lack of accountings, impractical and inadequate court supervision of the trustees and assets, and the general consensus of appearing parties that continued court supervision would serve no useful purpose, the court proceeded with a series of hearings on dissolution of the Trust. The court directed the interim trustees to collect and summarize all proposals for distribution of Trust assets and to make recommendations concerning the same. The forthcoming submission summarized 16 proposals, including proposals from the Pinoleville Band and the Coyote Valley Band. As well, the interim Trustees set forth their own proposal.


Another round of proposals followed a court hearing. Attempting to accommodate various competing interests, the interim trustees called for: (1) a right of first refusal to purchase five-acre parcels to the existing residents, for 90 percent of the appraised value; (2) a right of first refusal to the Pinoleville Band to purchase the remaining trust land not sold to current residents or set aside for cemeteries (the residual parcel), for 90 percent of the fair market value, subject to easements in perpetuity to all current residences and to the two cemeteries; and (3) creation of a cemetery district to maintain the two cemeteries.


*4 Williams filed a proposal on behalf of the Pinoleville Band to purchase the Trust property (minus acreage for the cemetery set asides) for the appraised value less 10 percent, less the pro rata per capita portion attributable to members of the tribe. The proposal also called for maximum two- acre life estates to current residents, with survivorship rights in the tribe, and for forming and operating the cemetery districts.


Appellants presented a proposal similarly giving life estates to current residents and with easements for access to graveyards, but calling for the remainder to be offered for sale to any trust beneficiary or group of beneficiaries, and to any federally recognized tribe with at least 100 members who are trust beneficiaries (a "qualified tribe"). An alternative proposal would give any qualified tribe a right of first refusal to purchase a portion of the trust property remaining after cemetery set asides and current beneficiary-resident purchases, in proportion to the number of trust beneficiaries who are members of that qualified tribe.


On October 16, 2001, the court approved a current list of approximately 653 beneficiaries. The trust dissolution hearing took place two months later. Standing by their recommendation that the Pinoleville Tribe should have the right to purchase the residual parcel, the interim trustees put forth two arguments. First, administrative simplicity: It would be easier to transfer the land to one entity rather than breaking it into parcels and selling plots piecemeal. Second, keeping the community peace: The Pinoleville Band owns the adjacent Rancheria, and if trust land were sold to another tribe, existing hostilities would be exacerbated. The Pinoleville Band supported the trustee's recommendations and concurred that there was historical enmity between the tribes, casting the matter as "a tribe versus tribe issue."


F. Order for Dissolution and Distribution


The court decreed that the Trust be dissolved and the assets distributed, describing the real property as a 59-acre parcel zoned for residential/agricultural use with a minimum parcel size of five acres. Five families have developed homes on the property and two cemeteries occupying a total of 10 acres have been maintained there for years. In December 2000 the property, excluding the value of the existing residential improvements and the cemetery acreage, was appraised at $892,500.


In light of all the pertinent circumstances, the court determined that the term "Pinoleville Indians" as used in the initial conveyances "more likely referred to Indian residents of the Trust Property and their beneficiaries rather than to the federally recognized Pinoleville Tribe. The Tribe was not formally recognized as an entity until 1911, more than ten years after the term was first used in the deeds and initial court petition and order."


The court concluded that its distribution scheme was most consistent with the perceived intent of the initial trustees and the Native Americans on whose behalf they acquired the property, and the most equitable resolution under existing circumstances. Pursuant to this scheme, the court directed the trustees to: (1) convey title to the five existing residential sites to the current residents, offered on reasonable terms following an appraisal, and with restrictive covenants giving first refusal rights to the Pinoleville Band prior to any proposed conveyance to someone other than a trust beneficiary or descendant; (2) prepare legal descriptions of the cemetery plots and recommend a legal framework for their long-term ownership and management; (3) obtain a legal description and appraisal of the 28.5-acre residual parcel and negotiate with the Pinoleville Band for its purchase; and (4) maintain accurate accounting, with any remaining cash assets distributed to beneficiaries upon conveyance of all the real property and payment of all expenses incurred in dissolving the Trust. The court reasoned that merger of the residual parcel with the Rancheria would reduce the potential for rivalries and conflict that might recur should the parcel be conveyed to beneficiaries who are not members of the Pinoleville Band. Moreover, a substantial number of beneficiaries are also enrolled members of the band and the two communities--the Rancheria and the Trust lands--have existed side-by-side for over 90 years without significant conflict.


*5 Appellants' primary argument on appeal is that the distribution did not accord with the settlors' intent. As a subargument appellants claim that the court's "adoption" of the trustee's recommendations was erroneous because the recommendations reflected a breach of their fiduciary duties.


II. DISCUSSION

A. Clarification and Statement of Issue


At the outset we point out that all parties were in consensus that the Trust should be dissolved. The issue on appeal is the manner of its distribution, specifically and only the distribution of the residual parcel.


Upon termination of a trust other than by revocation or with consent of the settlor or as provided in the trust instrument, the trust property shall be disposed "in a manner directed by the court that conforms as nearly as possible to the intention of the settlor as expressed in the trust instrument." (§ 15410, subd. (c).) In construing trust instruments, the court must, where possible, ascertain and effect the intent of the settlor. ( Crook v. Contreras (2002) 95 Cal.App.4th 1194, 1206.) Where the trust instrument is ambiguous on this point, courts can consider extrinsic evidence as to the circumstances surrounding its creation in order to divine the settlor's intent. (See Wells Fargo Bank v. Marshall (1993) 20 Cal.App.4th 447, 453.)


Appellants insist that the settlors' intent is clear. Specifically, they argue that prior rulings established the "fact" that the settlors created the trust to benefit "their descendants," [FN4] and that "fact" is consistent with the wording of the trust instrument and "evidence introduced in earlier proceedings." Respondent is adamant that ambiguity pervades the trust instrument, prior rulings are contradictory as to who are the intended beneficiaries and the court properly ordered distribution in accordance with section 15410, subdivision (c).


FN4. This statement begs the question, who were the settlors? I.C. and Elizabeth Reed conveyed the property to the original trustees. They were not Native Americans. It makes more sense that the original Native Americans who purchased the property for consideration were self-declared trustees who declared their intent to hold the property for the beneficiaries. Thus, they were both settlors and original trustees.


Let us clarify: This appeal is not about who are the current beneficiaries. Indeed, the court specifically rejected Williams's request to find that the Pinoleville Band was the intended beneficiary.


Moreover, the order that is the subject of this appeal states: "In 1956 and 1979 the court supervised comprehensive inquiries to identify for the first time the specific trust beneficiaries. The initial list of sixty names (as augmented in 1976) appears to have been based more upon tribal membership (though without any specific reference to the 'Pinoleville Tribe' as recognized by the federal government in 1911) than upon any relation to the original five trustees. The 1979 list added those who were 'related by blood' to the original six named trustees.... The 1979 approved list of four hundred and ninety-four beneficiaries was thus comprised of those who were 'related by blood' to either the original six trustees or to the sixty tribal members identified in the 1956/76 list. No effort was apparently made to identify the descendants of those unnamed 'Pinoleville Indians' on whose behalf the original trustees took title to the Trust Property. [¶] ... [T]he beneficiary list was brought current in 2001, based on the criteria established in 1979, to include a total of approximately six hundred and fifty-three individuals who established to the satisfaction of the trustees that they were 'related by blood' either to the original six trustees or to the tribal members identified in the 1956/76 list. The approved current beneficiary list was filed with the court on December 12, 2001. All responding beneficiaries apparently concur that most of the listed beneficiaries are also enrolled members in one of the several local recognized tribes, including the Pinoleville Band. It is also acknowledged that the Pinoleville Band includes many enrolled members who are not identified as trust beneficiaries."


*6 The question on appeal is whether the court erred in determining that the distribution plan it ordered "conforms as nearly as possible" to the intent of the settlors/original trustees. (§ 15410, subd. (c).) Although the current beneficiaries and manner of ascertaining them is settled, the intent of the original five trustees as to distribution of the trust property is not. For that analysis, we again look at the language of the trust instrument, court orders and relevant historical events.


B. The Court Did Not Abuse Its Discretion in Ordering the Plan that it Did


The declaration of trust appears in the 1893 deed describing, in handwritten words, the five purchasers as "(indians) and trustees of the [Pinoleville] Indians near Ukiah." Another handwritten provision states that the grantees were to have and hold the property "as such trustees of said Pinoleville Indians." At that time there was no federally recognized Pinoleville Band, and no definition of "the Pinoleville Indians" appeared in the 1893 deed.


We take judicial notice that in 1909, Jack Mace and John Stevenson, two of the initial trustees, along with others, filed a complaint in Mendocino County "on behalf of the Tribe of Pinoleville Indians" to set aside the sale of a portion of the Trust property by Napoleon Bonaparte, also one of the original trustees, to persons who were "not members" "of the tribe of Pinoleville Indians." The complaint stated that "the Pinoleville Indians are a tribe residing in tribal relations upon a tract of land situated in Mendocino County" and that the tribe members numbered approximately 150. Further, the complaint recited that the Pinoleville Indians acquired the property with "tribal funds." As to Napoleon Bonaparte, his interest in the property was an interest "in common with the other members" of the tribe.


The court rendered judgment quieting title in the trustees, ruling that defendants had no right or title to any portion of the Trust lands. It further held that defendants were not members "of the tribe of Pinoleville Indians" and enjoined them from interfering with "the tribal relations existing between the tribe of Pinoleville Indians." In the conclusions of the law, the court stated that plaintiffs were "all members of the tribe of Pinoleville Indians to the exclusion of all other persons, [and] are the beneficiaries of said trust."


The ensuing court rulings in this matter have been inconsistent, adding confusion, not clarity, to the intended meaning of "the Pinoleville Indians." The 1956 judgment identified the beneficiaries as "the Pinoleville Indians who from time immemorial have constituted a tribe of Indians," noting also that the conveyance was made "for the use and benefit of members of said tribe." Further, by the term "Pinoleville Indians" the settlors meant "the Pinoleville tribe of Indians" and intended the land to be held in trust for that tribe "in perpetuity." However, the court certified a list of 54 individuals as the sole beneficiaries of the Trust.


*7 The more recent 1979 ruling directed that current beneficiaries must be blood relatives of the original beneficiaries. However, at that time the Pinoleville Band's federal status had been revoked and thus the court did not have the option of naming the tribe as the intended beneficiary.


Grappling with the long history of the case and the diminishing returns of continued court supervision, the court set a hearing on dissolution of the Trust and directed the interim trustees to make recommendations that included consideration of numerous items. These included old unappealed court rulings; the interests of court-designated beneficiaries, longstanding residents, the existing "community" and the adjacent federally recognized Pinoleville Band; and the interest in preserving graveyards or other sites of tribal significance.


Having digested all the submitted materials and listened to the opinions of those who spoke at the hearing, the court concluded that its distribution plan was most consistent with the "perceived intent" of the original trustees and the individual Native Americans on whose behalf they acquired the property.


Appellants first maintain that by giving the Pinoleville Band--a "non- [b]eneficiary" entity--the right to purchase the property, the court "[d]ivested" the beneficiaries of a fundamental and valuable right for no consideration and thus violated the settlors' intent. We disagree.


First, it is the trustees who hold legal title to the Trust property, and as such they have the power to grant an option in connection with disposition of that property. (§ 16233.) Nothing in the statute requires that the trustees seek payment for the option, or that they first offer it to the beneficiaries.


Second, the exclusive right to negotiate for the purchase of the residual parcel is not an ordinary option. Rather, the "right" is integral to implementing the court's decision that merger of the residual parcel with the Rancheria is the best disposition of that parcel. The court's assessment derived from a number of factors, including: (1) the residual parcel is not large enough to provide housing for many of the current beneficiaries; (2) responding beneficiaries did not propose any use that would accommodate community or cultural services to the beneficiaries as a whole, or to a significant portion of beneficiaries; (3) conveyance to a relatively small number of beneficiaries would favor only those with significant financial resources; (4) the merger would mitigate the potential for tribal rivalries and friction; (5) a substantial number of beneficiaries are enrolled members of the Pinoleville Band; and (6) the Pinoleville Band has existed next to the Trust property for 90 years, without conflict.


Third, the decision to merge the two parcels comports with the perceived intent of the original trustees, who were interested in benefiting the "Pinoleville Indians," the Native American residents of the Trust lands. As the court found, the trust was established "to provide a secure homesite" for these beneficiaries. However, it cannot be ignored that from the beginning there was motivation to provide for the residents in community, later described in papers filed by some of the original trustees as "a tribe residing in tribal relations." Moreover, individual members of the tribe held their interest in the property "in common with" other members of the tribe. The intent then was not to provide for individuals qua individuals, but to provide for individuals in relationship to the group.


*8 Now, with over 650 identified beneficiaries, fulfillment of the residential purpose is no longer feasible. In order to provide any benefit to the beneficiaries, the court had to dissolve the trust, sell the property and distribute the sale proceeds. Under section 15410, subdivision (c), the court was obligated to craft a sale that most closely matched the intentions of the settlors of the trust. The court did this by providing for the continued residential use of the property by the current resident beneficiaries who had substantially improved it with expectation that their families could continue to reside there, while ensuring that the remaining beneficiaries shared in the net proceeds from the sale of the residential and residual parcels. In addition, the court-ordered disposition respects the initial trustees' intent by ensuring that the residual parcel would continue to serve a community purpose. Breaking the residual parcel into individual five-acre parcels for individual beneficiaries would destroy the community aspect of the Trust property. The Pinoleville Tribe in particular has deep connections to the Trust property. Most of the graves are Pinoleville Band tribal members, and the tribe's "Big Time"--the main social and cultural event that it undertakes-- takes place on Trust property.


Fourth, appellants overstate the value of the right to purchase the residual parcel. While the Pinoleville Band has a greater interest in acquiring it than does a third party member of the public or another tribe, if the property were placed for sale on the open market, the legal implications attendant to subdividing the property, developing on lands with two known cemeteries and unmarked graves and the like, could greatly increase the cost of any such transaction. On the other hand, negotiating with the Pinoleville Band has the potential to maximize proceeds to individual beneficiaries. This solution eliminates the expense and effort of putting the parcel out to bid among several entities or all beneficiaries, plus the Pinoleville Band as a tribe has access to cash to consummate the transaction and the greatest interest in purchasing the parcel.


Fifth, we find no merit in appellants' suggestion that the negotiated sale would transpire "in a way likely to deprive the beneficiaries of the best sale price for the land." They point out that court order does not set a minimum price, the Pinoleville Band does not have to meet any other offers, there is no language requiring the sales price to meet the appraised value, and prior proposals from the Pinoleville Band sought an outright gift or a 10 percent discount. Further, they claim that some "beneficiaries" expressed an interest in purchasing at a higher price than the Pinoleville Band. All this is speculative. The court directed the trustees to obtain a fair market value appraisal of the residual parcel. It also admonished the trustees to remember their fiduciary duties when considering the price and terms of sale, as well as the anticipated costs of legal subdivision. In other words, the trustees cannot ignore the beneficiaries in negotiating the price. Finally, the court set the matter for a status review, with reports of compliance forthcoming from the trustees. These orders sufficiently protect the beneficiaries.


*9 Appellants also suggest that the actual value to the Pinoleville Band might be far higher than any appraised value because the Pinoleville Band might build a casino on the neighboring Rancheria. Again, this is speculative. Moreover, representations were made at the hearing with respect to the Trust lands that the Pinoleville Band is "very, very open to ensuring that there would be no business development on the trust property, that it would be for social, cultural, governmental and perhaps housing purposes."


C. The Record Supports the Existence of Rivalries


Appellants also insist that the court's dissolution plan was impermissibly predicated on a finding of rivalries among tribes that had no evidentiary support. We do not agree.


To begin with, appellants have furnished a spotty, inadequate record, having only provided us with a transcript of the most recent hearing. That hearing consisted of arguments concerning the various proposals; testimony was not taken. Transcripts of other related proceedings were not provided.


Further, factionalism has been alluded to in prior, unchallenged court rulings. For example, the court's order of January 11, 2001, directing trustees to collect proposals and make specific recommendations, refers to "periodic and re-occurring disputes over the control, use and management" of Trust assets. As well, a minute order of August 23, 2001, refers to an 1899 petition wherein petitioners state: " ' That owing to factional differences among the said Indians, and among the present Trustees ....' " The court went on to observe that "[t]he same discord continues [today], and is one of the bases (mentioned in the preamble to this Court's Order filed January 11, 2001) [noted above] indicating that an end to State Court supervision and termination of this Trust is appropriate."


Additionally, intertribal factionalism was merely one of many considerations that informed the court's decision. And finally, at the hearing that was transcribed, counsel for appellants first downplayed the issue of tribal factionalism and hostility, calling it "differences of opinion." Later, he recognized that "there may be more than differences of opinion and the potential for hostilities" and acknowledged that the two tribes "have a history of hostility." In effect factionalism has been conceded. Similarly, the interim trustees--one from each tribe--underscored in their summaries the need to "promote the healing of the various Indian communities involved in this dispute." They also commented that to allow another tribe to purchase land adjacent to the Rancheria "would certainly exacerbate existing tensions within the Indian communities in the area."


D. Appellants Cannot Pursue Their Breach of Fiduciary Duty Claims


Appellants also try to recast their argument in breach of fiduciary duty terms. Namely, they assert that the trial court erred in adopting the trustee's proposal because that proposal was the product of breaches of fiduciary duties to the beneficiaries.


*10 This the first time appellants have said anything about breach of fiduciary duties. The matter should have been raised, and the pertinent factual issues tried, in the trial court. One perfect time to raise the matter would have been in connection with the hearing on interim trustee Joseph Myers's petition to resign. Appellants and their attorney were present at the hearing but did not argue for his replacement. The court denied the petition without prejudice. Significantly, the trustees are not parties to this appeal and clearly appellants are not seeking damages from them. Nonetheless the trustees, through their amicus curiae brief, have seen a need to "defend" the various accusations, without the benefit of a trial below on the issue. We deem the matter waived. ( Newton v. Clemons (2003) 110 Cal.App.4th 1, 11.)


More significantly, if we were to find that the trustees breached their fiduciary duties, what would be the remedy, and where is the prejudice? It appears that appellants' theory is that by largely adopting the trustee's final recommendations, the court impermissibly "endorsed" the trustees' breaches. The court, not the trustees, rendered the decision herein, exercising its independent judgment based on the history of the case and all the information and proposals before it. Everyone had an opportunity to put forth their point of view. The trustees held no special sway over the court. Indeed, the court itself designed the inquiry that the trustees pursued, through a series of very specific directions to collect proposals, summarize them in a neutral fashion, and make recommendations on which proposals or portions of proposals are lawful and equitable, keeping in mind a variety of interests, include those of the Pinoleville Band, the existing community and designated beneficiaries. We have already determined that the court properly exercised its discretion under section 15410 in crafting the distribution plan at issue here--that plan comes as close to the settlor/trustee's intention as is reasonably possible, given the changed circumstances that render continued fulfillment of the Trust purpose impossible. Churning through each argument of alleged breach would have no impact on our ultimate decision. Appellants simply have not shown that the process the court undertook was flawed.


III. DISPOSITION


The judgment is affirmed. The trustees' request that appellants reimburse the Trust for attorney fees and costs associated with submitting the trustees' amicus curiae brief is denied.


We concur: KAY, P.J., and RIVERA, J.


2004 WL 1304044 (Cal.App. 1 Dist.) Not Officially Published, (Cal. Rules of Court, Rules 976, 977)


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