United States v. County of Clark

CourtDistrict Court, D. Nevada
DecidedFebruary 24, 2021
Docket2:17-cv-02303
StatusUnknown

This text of United States v. County of Clark (United States v. County of Clark) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. County of Clark, (D. Nev. 2021).

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 UNITED STATES OF AMERICA, Case No. 2:17-cv-02303-MMD-BNW

7 Plaintiff, ORDER 8 v.

9 CLARK COUNTY OF, NEVADA LINKS, INC., 10 Defendants. 11

12 I. SUMMARY 13 Plaintiff the United States of America sued Defendants County of Clark (the 14 “County”) and Nevada Links, Inc. for leasing the land upon which Nevada Links built the 15 Bali Hai golf course near the Las Vegas strip to Nevada Links for below-market rent, in 16 alleged contravention of the County’s statutory, contractual, and fiduciary duties to 17 Plaintiff. Before the Court are the parties’ cross-motions for summary judgment.1 (ECF 18 Nos. 130, 131, 134.) Because the Court agrees with Defendants that Plaintiff’s claims 19

20 1The Court also reviewed the associated briefing, joinders, declarations, and exhibits. (ECF Nos. 132, 133, 135, 136, 137, 140, 141, 143, 144, 145, 146, 147, 148, 21 149, 150, 152, 153, 154, 155, 156, 157, 158, 159, 160.) In addition, Nevada Links filed an administrative motion to strike its reply in support of its motion for summary judgment 22 (ECF No. 154). (ECF No. 161.) Nevada Links explains a technical error caused it to file the wrong version of its reply brief, and asks the Court to consider the amended version 23 (ECF No. 160) instead of the original (ECF No. 154). (ECF No. 161.) Plaintiff responds to note that the amended version of Nevada Links’ reply brief is nearly three pages longer 24 than the original version. (ECF No. 162.) Nevada Links replies by emphasizing that its filing error was an unintentional, administrative error (ECF No. 163), and submits a 25 sworn declaration from its counsel in support (ECF No. 164). In the absence of any evidence to the contrary, the Court takes Nevada Links’ counsel at his word and 26 concludes this was an honest mistake. The Court accordingly finds good cause to grant Nevada Links’ administrative motion to strike, and will do so. The Court thus reviewed 27 the amended version of Nevada Links’ reply (ECF No. 160) instead of the original version (ECF No. 154). 28 1 are time barred, and as further explained below, the Court will grant Defendants’ motions 2 in pertinent part, and deny Plaintiff’s motion, resolving this case in Defendants’ favor. 3 II. BACKGROUND2 4 In 1999, Plaintiff transferred 5,000 acres of vacant federal land near McCarran 5 International Airport in Las Vegas to the County under the Southern Nevada Public Land 6 Management Act of 1998, Pub. L. No. 105-263, 112 Stat. 2343 (1998) (the “Act”). (ECF 7 No. 1 at 2-3.) Before then, United States Department of the Interior’s Bureau of Land 8 Management (“BLM”) had administered the land. (Id. at 3.) The Act required the County 9 to lease this land for fair market value. (Id.) The Act also required the County to pay 85% 10 of the money it generated by leasing the land to BLM, which BLM would spend on land 11 acquisition, conservation, and the development of parks and trails. (Id. at 3-4.) 12 In accordance with the Act, Plaintiff, through BLM, conveyed 91 acres of land to 13 the County by a deed dated March 30, 1999 (the “Deed”) that the County now leases to 14 Nevada Links for the Bali Hai golf course. (Id. at 4.) Like the Act, the Deed also required 15 the County to lease the land for fair market value, and required the County to pay a 16 portion of the proceeds to BLM. (Id.) 17 On July 20, 1999, the County agreed to lease approximately 154 acres of land to 18 Nevada Links for the Bali Hai golf course (the “Lease”). (Id. at 5.) The Lease specified 19 that the County would not receive any fixed rent payments, but would instead receive 20 40% of “net revenue,” “defined as total revenue minus deductions for approved 21 budgeted expenses, capital improvement expenditures, a management fee, debt 22 service, and a reserve for maintenance and operations.”3 (Id. at 5.) The County and 23 Nevada Links have amended the lease four times. (Id.) 24 In 2004, the County and BLM signed a Memorandum of Agreement (the “MOA”), 25 which, in pertinent part, reiterated the fair market rent requirement and stated that fair

26 2The following facts are undisputed unless otherwise noted.

27 3The parties generally refer to these provisions as the participatory rent provisions. For convenience, the Court will as well. 28 1 market rent must be determined by one or more disinterested real estate appraisers, 2 licensed by the State of Nevada, who perform their appraisal using widely accepted 3 appraisal standards. (Id. at 4-5.) 4 Much of the parties’ dispute centers on the County and Nevada Links’ fourth 5 amendment to the Lease (the “Fourth Amendment”), which, in pertinent part: (1) again 6 restated that the land must be rented for fair market value; (2) switched the rent from a 7 participatory rent agreement to a fixed rent of $100,000 per year. (Id. at 5-6.) The County 8 and Nevada Links negotiated and signed the Fourth Amendment in 2011. (Id. at 5-7.) 9 From the commencement of the Lease in 1999 to 2011, Nevada Links never paid 10 the County any money in rent under the participatory rent provisions in the Lease. (ECF 11 Nos. 131 at 9, 144 at 11.) The Act’s program manager at BLM, Merv Boyd, submitted a 12 declaration stating he became aware of the Lease, and that Nevada Links was not 13 paying any rent under it, in 2005 or 2006. (ECF No. 133-1 at 98.) Similarly, Ronnie 14 Hawkins, who was working as the lead appraiser at the BLM’s pertinent office at the 15 time, testified at his deposition that he became aware of the Lease, along with the fact 16 that it was generating no rent money, in a meeting with Boyd sometime in 2005 or 2006. 17 (ECF No. 133-1 at 107-09.) Plaintiff nonetheless takes the position that it was unaware 18 of the Lease until August 2010. (ECF Nos. 130-28 at 7, 144 at 11-12.) This dispute is 19 further discussed in Section IV infra. 20 On August 11, 2011, the County sent BLM a copy of the proposed Fourth 21 Amendment for approval (ECF No. 133-1 at 135), which said the rent would be 22 $100,000/year (id. at 149). (See also ECF No. 144 at 12.) On September 6, 2011, the 23 County’s Board of Commissioners approved the Fourth Amendment. (ECF Nos. 131 at 24 10, 144 at 12.) That same month, the County sought BLM’s explicit approval of the 25 Fourth Amendment, but BLM eventually declined because BLM obtained an appraisal 26 indicating that $100,000 per year was well below fair market rent. (ECF No. 131 at 11- 27 13.) Thus began a dispute about fair market rent for the Bali Hai golf course land that 28 eventually led to this lawsuit. (Id. at 12-13.) 1 Plaintiff filed suit on September 1, 2017. (ECF No. 1.) Plaintiff asserts the 2 following claims against the County: (1) breach of the Deed covenant (id. at 7-8); (2) 3 breach of the MOA (id. at 8-9); (3) breach of fiduciary duty (id. at 9); and (4) declaratory 4 judgment requiring the parties to renegotiate the Lease (id. at 10). Against Nevada 5 Links, Plaintiff asserts a breach of fiduciary duty (transferee and participant) claim (id. at 6 9-10), and the same declaratory judgment claim Plaintiff asserts against the County, 7 asking that the Court require the County and Nevada Links to renegotiate the Lease (id. 8 at 10). 9 The Court previously denied Nevada Links’ motion to dismiss Plaintiff’s fiduciary 10 duty claim asserted against it, finding in pertinent part that: (1) the Act created a trust 11 relationship between Plaintiff and the County (ECF No. 50 at 9); and (2) Nevada Links 12 knew or should have known the County breached its duty of trust when it entered into 13 the Fourth Amendment with Nevada Links (id. at 10). 14 III. LEGAL STANDARD 15 “The purpose of summary judgment is to avoid unnecessary trials when there is 16 no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S.

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United States v. County of Clark, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-county-of-clark-nvd-2021.