Red Mountain Machinery Co. v. Grace Investment Co.

Red Mountain Machinery Company (“Red Mountain”) appeals the district court’s order granting summary judgment in favor of Grace Investment Co. (“Grace”) and the Canadian Imperial Bank (“the Bank”) in Red Mountain’s action seeking foreclosure of a leasehold interest in real property leased by Grace from the Yavapai-Prescott Indian Tribe (“the Tribe”). The district court held that the Arizona mechanics’ lien law was preempted by federal law. We reverse and remand.

*1409 BACKGROUND

The facts are undisputed. Grace is an Arizona corporation engaged in real estate investment and development. By a lease dated October 7, 1988, Grace leased tribal lands from the Yavapai-Prescott Indian Tribe to construct and operate the Frontier Village shopping center. The Yavapai-Pres-cott Indian Tribe is a federally recognized and protected Indian Tribe. The lease was entered into in compliance with federal laws governing the leasing of Indian lands. See 25 U.S.C. § 415 (a) (Supp. IV 1992); 25 C.F.R. pt. 162 (1993). The lease has a term of sixty-five years and contains an option to renew for an additional twenty-year period. The lease was approved by the Secretary of the Interior, through the Acting…