2017 WL 1787561 (Mash. Pequot Tribal Ct.)
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Mashantucket Pequot Tribal Court.
SANTANDER BANK, N.A.
John A. COLEBUT, et al.
April 26, 2017.
MEMORANDUM OF DECISION
THOMAS J. LONDREGAN, Judge.
*1 On March 8, 2017, this Court, sua sponte, posed the question that if the judgment debt exceeded the value of the subject property, can the Court conduct a sale by auction? The Court raised this question as a result of its review of 25 M.P.T.L. ch. 4 § 3(f). That section makes a distinction between when the fair market value exceeds the judgment debt and when it does not. If the fair market value exceeds the judgment debt the judgment shall be enforced by auction. If the fair market value does not exceed the judgment debt, the Tribal Court does not enforce the judgment by auction but is instead ordered to proceed in accordance with 25 M.P.T.L. ch. 4 § 9.
Section 9 in turn provides that where the judgment debt exceeds the fair market value of the property OR where the Court determines that a re-auction is not in the best interest of the lender, the Tribal Court shall order the immediate ejectment of the debtor and all occupants, and direct DOH to inspect the property, make improvements and prepare the dwelling for use by an occupant.1 See 25 M.P.T.L. ch. 4 § 9(a). Since the subject property in this case has never been auctioned, Section 9 does not apply insofar as it provides for a re-auction. The property does fall within the first situation that triggers Section 9, i.e., when the judgment debt exceeds the fair market value of the property. In such a case, the Court must read Section 3(f) and Section 9(a) together. They seem to suggest that the application of Section 9 is not discretionary but mandatory.2 If so, this begs the question whether the Court can order any auction here, since the judgment debt exceeds the fair market value of the subject property. In other words, must the Court direct DOH to enter into an occupancy agreement as the only remedy? Putting aside the esoteric analysis of when “shall” means “may,” the inconsistencies of the entire Title lead the Court to employ a practical common sense approach in reviewing the findings and purpose of the law, when considering the Title as a whole. See 25 M.P.T.L. ch. 1 §§ 2, 3.
Title 25 is not a model of clarity. It will not be known as one of the better drafted statutes of Mashantucket law. In fact, both parties have arrived at this conclusion. The Court has reviewed Title 25 in its entirety and notes particularly that the foreclosure procedures are necessary to provide a remedy for loan program lenders, while at the same time the procedures are necessary for the protection of Tribal Members. The purpose of the law is to preserve and protect the rights of Tribal Members in the occupancy of dwellings on the reservation and to provide recourse to lenders for an orderly and fair means of evicting those persons found to be in default and unlawfully occupying the dwelling. See 25 M.P.T.L. ch. 1 § 3.
The jurisdiction of the Tribal Court is found in 25 M.P.T.L. ch. 4 § 2(a) which states that “[t]he Tribal Court shall have exclusive jurisdiction to hear an action to determine any Debt and to enforce any Assignment Mortgage encumbering any Assignment.3 The Tribal Court is expressly authorized and empowered to direct the judicial sale of an Assignment by Auction as hereafter provided for.” Id. The “Tribal Court is further authorized and empowered to enter such other orders and fashion such other remedies as are consistent with the purposes and intent of this Chapter and are necessary for the orderly and equitable administration of justice.” 25 M.P.T.L. ch. 4 § 2(b).
*2 Notwithstanding the authority for the Tribal Court to order the sale of the debtor’s property by auction in Section 2(a), Section 3(f), as stated above, seems to command that if the debt exceeds the value of the property, the Court must enter into an occupancy agreement for rental income per Section 9. Furthermore, the provisions in Chapter 4 that authorize the Court to order a sale by auction, do so only to the extent provided in Title 25. See, e.g., 25 M.P.T.L. ch. 4 § 2(a) (“judicial sale of [property] as hereafter provided for”); 25 M.P.T.L. ch. 4 § 3(c) (“the Tribal Court shall order the sale of the [property] by Auction as herein provided ...”); 25 M.P.T.L. ch. 4 § 3(f) (“the judgment shall be enforced by Auction as hereafter provided for”); 25 M.P.T.L. ch. 4 § 3(g) (“[s]ubject to subsection f, above, and the provisions of Sections 6 and 9 of this Chapter, the Tribal Court shall proceed to order the sale of the [property]” (emphasis added to all).
The Court must reconcile this apparent conflict between the mandate of the aforementioned provisions and the purpose of the statute to preserve the rights of the borrower (Tribal Member) and lender as set out in 25 M.P.T.L. ch. 1 § 3. It cannot conclude from reading Title 25 as a whole that there can be no initial auction if the debt exceeds the fair market value of the property. To conclude that when the judgment debt exceeds the fair market valuation the borrower must be evicted and a subsequent occupant found for rental before an auction is scheduled, is not in the best interest of either the borrower (Tribal Member) or lender. Such a holding would defy common sense and logic. It would deprive the lender of the right to call for an auction whenever the debt exceeds the value of the property. This result would be inconsistent with the aim of preserving the rights of the lender as provided in 25 M.P.T.L. ch. 1 § 3. It would also accomplish nothing by way of preserving the rights of the borrower (Tribal Member) as he/she would still be evicted pursuant to Section 9. On the other hand, the only way the lender will be able to make a decision on whether to accept a lump sum from an auction or receive rental payments for an indefinite period of time is to have an auction. After the auction the lender can decide whether or not to accept the auction price, or request a re-auction or request an occupancy agreement.
Title 25 empowers the Court to fashion remedies consistent with the intent and purpose of the statute. See 25 M.P.T.L. ch. 4 § 2(b). The Court, in response to its sua sponte inquiry, and after considering the positions and arguments of the parties, finds that it has the power to grant a lender’s request for auction where the judgment debt exceeds the fair market value of the property. Therefore, the Court hereby ORDERS the auction of the subject property unless the Tribe exercises “any express right to redeem the [property] arising under Tribal law, as may be provided in the Assignment Mortgage or may arise under the terms of any Loan Program under which the Assignment Mortgage was issued.” See 25 M.P.T.L. ch. 4 § 3(g).
*3 This Order shall be stayed until June 27, 2017, for the Tribe to consider its right to redeem the property. If the Tribe does not redeem the property by June 27, 2017, the Court hereby ORDERS the ejectment of the debtor, and any occupant, authorized or unauthorized resident pursuant to 25 M.P.T.L. ch. 4 § 3(c) by DOH. After said ejectment, the DOH shall proceed with auction of the subject property as provided in 25 M.P.T.L. ch. 4. DOH shall also inspect the Property and submit a report to this Court as to its condition and fair rental value, so an occupancy agreement may be established in the event the auction yields no acceptable bid.
Given the complex wording of Title 25, this Memorandum will paraphrase the statute in the vernacular.
Section 3(f) provides: “[i]f ... the Judgment Debt exceeds the Assignment Value, Tribal Court shall proceed in accordance with the provisions of Section 9 of this Chapter” (emphasis added). Section 9(a) provides: [i]f ... the Judgment Debt exceeds the Assignment Value as provided for in Section 3(f) of this Chapter ... the Tribal Court shall ... conditionally convey the Assignment Rights of the Debtor to DOH as trustee of the Tribal Court for the benefit of the [lender] ...” (emphasis added).
“Assignment” is real property and the dwelling thereon. See 25 M.P.T.L. ch. 3 § 1(a); 27 M.P.T.L. ch. 1 § 4(b). Hereinafter “Assignment” is referred to as “property” or “dwelling.”