Facts

Plaintiff Yavapai-Apache Nation loaned $22,637,500 to La Posta Band of Diegueno Mission Indians in connection with the construction and operation of a casino. La Posta defaulted on the loan.

PLAINTIFF'S CONTENTIONS:
Plaintiff claimed that La Posta breached the loan agreement and committed fraud, including by obtaining an extension of time to start repayments on the loan by falsely promising to consider a third-party consultant's recommendations regarding management, funding and operation of La Posta's casino.

DEFENDANT'S CONTENTIONS:
Defendants contended there was no harm to plaintiff from a forbearance of loan payments.

Defendant argued that fraud is only relevant to determine whether plaintiff's recovery is limited to collateral as defined by the loan agreement or may include assets beyond the collateral.

Result

In a Dec. 30, 2014 Findings and Order After Hearing, following a bench trial, the court found plaintiff was harmed when plaintiff granted a loan forbearance, and allowed plaintiff to pursue its accusation of fraud before a jury. In the bench trial phase, the court held that plaintiff's contract interpretation and damage calculation is correct, and that Yavapai-Apache Nation is therefore entitled to $44,470,705 in damages.

Other Information

On Jan. 20, 2015, the Court of Appeal, Fourth Appellate District, declined to hear defendant's Writ of Mandate and Request for Stay based on defendant's jurisdictional arguments that the superior court does not have jurisdiction over plaintiff's purportedly unpled accusation of fraud and that the superior court does not have jurisdiction to conduct a jury trial without violating defendant's tribal sovereign immunity. Fraud will be tried to a jury beginning on March 2, 2015. According to the defense, if a jury finds the existence of fraud arising from defendant's request for a loan forbearance, the third bench trial phase of the trifurcated trial would consider defendant's cross-complaint allegations that plaintiff's recovery does not include any interest in defendant's Indian Revenue Sharing Trust Fund distributions from the California Gambling Control Commission or any other assets specifically excluded by the loan agreement. FILING DATE: May 9, 2013.