Black Hills Institute of Geological Research v. Fort Peck Paleontology et al

Filing 101

AMENDED Statement of Undisputed Fact re: 80 MOTION for Partial Summary Judgment. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G) (Tease, Antoinette) Modified on 10/20/2011 to add word "Amended". (SLR, ).

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TEASE, ANTOINETTE
ROCKY MOUNTAIN TECHNOLOGY GROUP, INC
207 N BROADWAY STE 509
BILLINGS, MT 59101-1951

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1 of 8 DOCUMENTS
Black Hills Institute of Geological Research, Inc., a South Dakota corporation,
Appellant, v. Maurice Williams, Appellee.
No. 95-3312
UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
88 F.3d 614; 1996 U.S. App. LEXIS 16015
May 15, 1996, Submitted
July 5, 1996, Filed
PRIOR HISTORY:
[**1] Appeal from the United
States District Court for the District of South Dakota.
CIV 94-5013. Honorable Richarg H. Battey, District
Judge.

Inc. (the Institute) appeals the district court's 1 holding
that it was not entitled to a $ 209,000 lien against a
tyrannosaurus rex fossil for work performed in
excavating and preparing the fossil. We affirm.
1
The Honorable Richard H. Battey, Chief
Judge, United States District Court for the District
of South Dakota.

DISPOSITION: Affirmed.

COUNSEL: Counsel who presented argument on behalf
of the appellant was Patrick Duffy of Rapid City, South
Dakota.
Counsel who presented argument on behalf of the
appellee was Robert Aaron Mandel, U.S. Attorney, Rapid
City, South Dakota.
JUDGES: Before RICHARD S. ARNOLD, Chief Judge,
MAGILL, Circuit Judge, and VAN SICKLE, * District
Judge.
*
THE HONORABLE BRUCE M. VAN
SICKLE, United States District Judge for the
District of North Dakota, sitting by designation.
OPINION BY: MAGILL
OPINION
[*615] MAGILL, Circuit Judge.
The Black Hills Institute of Geological Research,

I.
The facts surrounding the discovery, excavation, and
preparation of the fossil are discussed at length in Black
Hills Inst. of Geological Research v. South Dakota Sch.
of Mines & Tech., 12 F.3d 737 (8th Cir. 1993) (Black
Hills III), cert. denied, 115 S. [**2] Ct. 61 (1994). We
will discuss herein only those facts necessary for this
appeal.
In August 1990, employees of the Institute
discovered a tyrannosaurus rex fossil on Maurice
Williams's land. The Institute excavated the fossil and
gave $ 5000 to Williams, allegedly in exchange for title
to the fossil. Over the course of the next few years, the
Institute spent approximately $ 209,000 in excavating and
preparing the fossil.
Williams's land, however, is located within the
Cheyenne River Sioux Indian Reservation of South
Dakota, which is held in trust for Williams by the United
States. On December 15, 1993, this Court concluded that

Page 2
88 F.3d 614, *615; 1996 U.S. App. LEXIS 16015, **2

the fossil was held in trust by the United States for
Williams and, as such, it was not alienable by Williams
absent approval by the Department of the Interior (DOI).
See id. at 742-44 (applying 25 U.S.C. §§ 464 and 483).
Because the fossil was removed from the land without the
knowledge or consent of the United States, the attempted
sale was void and the Institute had no legal right, title, or
interest in the fossil as severed from the land.

improves the purchased item in the mistaken belief that
he is the true owner, equity will not impose a lien in favor
of one who makes improvements knowing that title is in
another. See 41 Am. Jur. 2d, Improvements § 11 (1995).

On February 8, 1994, the Institute filed a lien
statement under South Dakota law, asserting a $ 209,000
lien [**3] against the fossil. The Institute then filed a
complaint in South Dakota state court seeking either a
statutory or common law lien on the fossil for the work
performed in excavating and preparing it.

[The Institute] was willfully blind to the
existing statutes and regulations governing
Indian trust land. Had [the institute] spent
the time necessary to research the law, the
only inescapable conclusion would have
been that [the Institute] had no right to the
fossil
without
the
government's
permission.

The case was removed to the federal district court for
the District of South Dakota. The district court granted
summary judgment in favor of the defendants. The court
noted that the Institute did not meet the requirements for
a statutory lien, and the court refused to impose an
equitable lien on [*616] the grounds that the Institute
acted with willful blindness to statutes which clearly
precluded the Institute from gaining rights to the fossil
absent government permission. The Institute now
appeals.
II.
The law of this case is that the fossil, even after
severance from the land, is held in trust by the United
States for Williams and is not alienable by Williams
absent DOI approval. See id. The Institute conceded this
at oral argument, but nevertheless contends that because
it spent a considerable amount of money in excavating
the fossil while under a mistaken belief that the fossil was
alienable, it is entitled to an equitable or statutory lien.
We disagree.
A.
An equitable lien "is [**4] implied and declared by
a court of equity out of general considerations of right
and justice as applied to the relations of the parties and
the circumstances of their dealings." In re Doyen, 56
Bankr. 632, 633 (Bankr. D.S.D. 1986) (citing Farmers &
Merchants Bank v. Commissioner of Internal Revenue,
175 F.2d 846, 849 (8th Cir. 1949)); see also Dorman v.
Crooks State Bank, 55 S.D. 209, 225 N.W. 661, 664 (S.D.
1929) (describing equitable lien). While equity will
impose a lien in favor of a bona fide purchaser who

In the present case, the district court concluded that
the Institute did not act in good faith in excavating the
fossil, noting that

[**5]
Mem. Op. at 8 (D.S.D. Aug. 11, 1995). Because the
conclusion that the Institute acted in bad faith is a factual
determination, we review only for clear error. See
Garwood v. American Motorists Ins. Co., 775 F.2d 228,
231 (8th Cir. 1985).
This Court has already noted that the Institute could
have taken any number of steps to protect itself and that
the fact "that the fossil was embedded in land located
within the boundaries of the Cheyenne River Sioux
Indian Reservation should have alerted Black Hills to the
possibility that the federal government had some interest
in [the fossil]." Black Hills III, 12 F.3d at 744. It is a long
settled rule that a party who has knowledge of facts that
would cast doubt upon the transferability of title has a
duty to investigate that title, and that a lack of caution and
diligence in such situations amounts to bad faith. See
State ex. rel. Dept. of Revenue v. Karras, 515 N.W.2d
248, 251 (S.D. 1994) ("notice of facts which would put a
prudent person upon inquiry[] impeaches the good faith
of the subsequent purchaser") (quoting Betts v. Letcher, 1
S.D. 182, 46 N.W. 193, 196 (S.D. 1890)); see also Moelle
v. Sherwood, 148 U.S. 21, 30, 37 L. Ed. 350, 13 S. Ct.
426 (1893) [**6] (bona fide nature of transaction
depends in part on reasonable diligence in ascertaining
whether transfer is a "mere speculative chance in the
property"); Brush v. Ware, 40 U.S. 93, 111, 10 L. Ed. 672
(1841) (having failed to diligently investigate known
facts which cast doubt upon validity of title, the purchaser
cannot prejudice the rights of innocent persons through

Page 3
88 F.3d 614, *616; 1996 U.S. App. LEXIS 16015, **6

his negligence). Given the Institute's failure to diligently
investigate whether the fossil could be alienated absent
government approval, it cannot be considered a good
faith, bona fide purchaser. It is therefore not entitled to an
equitable lien in its favor.
B.
The Institute also contends that a statutory lien may
be imposed in its favor. Under South Dakota law, the lien
ceases 120 days after any work, skill, services, or
material was furnished to the fossil, unless a statement of
lien is filed within this period. S.D.C.L. § 44-9-15 (1983).
The last day any [*617] work was performed on the
fossil--the day it was seized by federal authorities--was

May 14, 1992. The lien statement was not filed until
February 8, 1994, well after the expiration of the filing
period. Because the statute is quite clear that the 120-day
clock begins to [**7] run upon the completion of the
work, and not upon the date when the parties' interests in
the item are finally adjudicated, the Institute does not
meet the requirements for a statutory lien.
III.
The Institute is not entitled to either an equitable lien
or a statutory lien. Therefore, the decision of the district
court is affirmed.

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Send To:

TEASE, ANTOINETTE
ROCKY MOUNTAIN TECHNOLOGY GROUP, INC
207 N BROADWAY STE 509
BILLINGS, MT 59101-1951