United States v. County of Clark

• Court: District Court, D. Nevada
• Decided: October 13, 2022
• Docket: 2:17-cv-02303
• Status: Unknown

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 ORDER Plaintiff, 8 v.

9 COUNTY OF CLARK and 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 allegedly below-market 16 rent, in alleged contravention of the County’s statutory, contractual, and fiduciary duties 17 to Plaintiff. The Court previously found that Defendants were entitled to summary 18 judgment on Plaintiff’s breach of contract and fiduciary duty claims—because Plaintiff’s 19 claims were time-barred by a six-year statute of limitations (ECF No. 166 (“Prior 20 Order”))—but the Ninth Circuit Court of Appeals reversed and remanded (ECF No. 175 21 (“Memorandum”)), finding that Plaintiff’s claims were timely. 22 The Court now addresses the remaining pertinent arguments in Plaintiff’s renewed 23 motion for partial summary judgment (ECF No. 130) and Nevada Links’s motion for 24 summary judgment (ECF No. 134).1 For the reasons discussed below, the Court grants 25 in part and denies in part Plaintiff’s motion for partial summary judgment. The Court also 26 denies Nevada Links’s motion for summary judgment. 27 28 1The Court has reviewed the corresponding responses (ECF Nos. 145, 143) and 1 II. BACKGROUND2 2 A. Underlying Facts 3 In 1999, Plaintiff transferred 5,000 acres of vacant federal land near McCarran 4 International Airport in Las Vegas to the County under the Southern Nevada Public Land 5 Management Act of 1998, Pub. L. No. 105-263, 112 Stat. 2343 (1998) (the “Act”). (ECF 6 No. 1 at 2-3.) Before then, United States Department of the Interior’s Bureau of Land 7 Management (“BLM”) had administered the land. (Id. at 3.) The Act required the County 8 to lease this land for fair market value. (Id.) The Act also required the County to pay 85% 9 of the money it generated by leasing the land to BLM, which BLM would spend on land 10 acquisition, conservation, and the development of parks and trails. (Id. at 3-4.) 11 In accordance with the Act, Plaintiff, through BLM, conveyed 91 acres of land to 12 the County by a deed dated March 30, 1999 (the “Deed”) that the County now leases to 13 Nevada Links for the Bali Hai golf course. (Id. at 4.) Like the Act, the Deed also required 14 the County to lease the land for fair market value and required the County to pay a portion 15 of the proceeds to BLM. (Id.) 16 On July 20, 1999, the County agreed to lease approximately 154 acres of land to 17 Nevada Links for the Bali Hai golf course (the “Lease”). (Id. at 5.) The Lease specified 18 that the County would not receive any fixed rent payments, but would instead receive 19 40% of “net revenue,” “defined as total revenue minus deductions for approved budgeted 20 expenses, capital improvement expenditures, a management fee, debt service, and a 21 reserve for maintenance and operations.”3 (Id. at 5.) The County and Nevada Links have 22 amended the lease four times. (Id.) 23 In 2004, the County and BLM signed a Memorandum of Agreement (the “MOA”), 24 which, in pertinent part, reiterated the fair market rent requirement and stated that fair 25

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. 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 On August 11, 2011, the County sent BLM a copy of the proposed Fourth 10 Amendment for approval (ECF No. 133-1 at 135), which said the rent would be 11 $100,000/year (id. at 149). (See also ECF No. 144 at 12.) On September 6, 2011, the 12 County’s Board of Commissioners approved the Fourth Amendment. (ECF No. 131 at 10; 13 ECF No. 144 at 12.) That same month, the County sought BLM’s explicit approval of the 14 Fourth Amendment, but BLM eventually declined because BLM obtained an appraisal 15 indicating that $100,000 per year was well below fair market rent. (ECF No. 131 at 11- 16 13.) Thus began a dispute about fair market rent for the Bali Hai golf course land that 17 eventually led to this lawsuit. (Id. at 12-13.) 18 B. Relevant Procedural History 19 Plaintiff asserts the following claims against the County: (1) breach of the Deed 20 covenant (ECF No. 1 at 7-8); (2) breach of the MOA (id. at 8-9); (3) breach of fiduciary 21 duty (id. at 9); and (4) declaratory judgment requiring the parties to renegotiate the Lease 22 (id. at 10). Against Nevada Links, Plaintiff asserts a breach of fiduciary duty (transferee 23 and participant) claim (id. at 9-10), and the same declaratory judgment claim Plaintiff 24 asserts against the County, asking that the Court require the County and Nevada Links 25 to renegotiate the Lease (id. at 10). 26 The Court previously denied Nevada Links’ motion to dismiss Plaintiff’s fiduciary 27 duty claim asserted against it, finding in pertinent part that: (1) the Act created a trust 1 relationship between Plaintiff and the County (ECF No. 50 at 9); and (2) accepting 2 Plaintiff’s factual allegations as true, Nevada Links knew or should have known the 3 County breached its fiduciary duty when it entered into the Fourth Amendment with 4 Nevada Links (id. at 10). The Court also previously found that Plaintiff’s breach of contract 5 and fiduciary duty claims were barred by a six-year statute of limitations and accordingly 6 granted Defendants’ motions for summary judgment. (ECF No. 166.) 7 On appeal, the Ninth Circuit however found that Plaintiff’s claims were timely and 8 reversed and remanded the Court’s summary judgment ruling. (ECF No. 175 at 1-2.) The 9 Ninth Circuit also addressed two of the County’s arguments that relate to interpreting the 10 Fourth Amendment that this Court had not previously addressed: (1) that the fixed rent 11 term and the Fourth Amendment as a whole are “inoperative” and (2) that even if the fixed 12 rent term came into effect on its date of approval by the Board of County Commissioners, 13 it did not replace the participatory rent and the two rent terms were both in effect following 14 the approval date. (Id. at 6-7.) The Ninth Circuit held that because the Fourth Amendment 15 is ambiguous as to both arguments, these issues cannot be decided on summary 16 judgment, and therefore remanded these issues for trial. (Id. at 7-12.) 17 Following its order on the Ninth Circuit’s mandate (ECF No. 178), the Court 18 vacated its Prior Order (ECF No. 166) and corresponding judgment (ECF No. 167) and 19 ordered the parties to file a joint pretrial order. The parties requested the Court vacate the 20 joint pretrial order deadline and schedule a virtual status conference to discuss the 21 disposition of the remaining viable issues in the parties’ motions for summary judgment. 22 (ECF No. 179.) The Court granted the parties’ request. (ECF No. 180.) At the status 23 conference, the Court directed the parties to file a joint status report identifying the issues 24 that remain to be resolved in each party’s summary judgment briefing and stated that it 25 will delay resolution of the future damages issue until a later date, to be addressed only 26 if the parties are unable to agree upon a resolution. (ECF No. 184.) The Court now 27 1 addresses the remaining issues identified by the parties in their joint status report (ECF 2 No. 185).4 3 III. LEGAL STANDARD 4 “The purpose of summary judgment is to avoid unnecessary trials when there is 5 no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 6 18 F.3d 1468, 1471 (9th Cir. 1994) (citation omitted). Summary judgment is appropriate 7 when the pleadings, the discovery and disclosure materials on file, and any affidavits 8 “show there is no genuine issue as to any material fact and that the movant is entitled to 9 judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue 10 is “genuine” if there is a sufficient evidentiary basis on which a reasonable factfinder could 11 find for the nonmoving party and a dispute is “material” if it could affect the outcome of 12 the suit under the governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248- 13 49 (1986). Where reasonable minds could differ on the material facts at issue, however, 14 summary judgment is not appropriate. See id. at 250-51. “The amount of evidence 15 necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to 16 resolve the parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 17 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Service Co., 391 U.S. 253, 18 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and 19 draws all inferences in the light most favorable to the nonmoving party. See Kaiser 20 Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986) (citation 21 omitted). 22 The moving party bears the burden of showing that there are no genuine issues of 23 material fact. See Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once 24

25 4The County indicated in the parties’ joint status report that it withdraws from consideration the only remaining issue for resolution in its renewed motion for summary 26 judgment. (ECF No. 185 at 4.) In addition, Plaintiff does not contend that any issues remain to be resolved in its motion for summary judgment as against the County. (Id. at 27 3-4.) The Court therefore need not—and does not—address any portion of the County’s summary judgment briefing (ECF Nos. 131, 149, 155). 1 the moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting 2 the motion to “set forth specific facts showing that there is a genuine issue for trial.” 3 Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings 4 but must produce specific evidence, through affidavits or admissible discovery material, 5 to show that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 6 1991), and “must do more than simply show that there is some metaphysical doubt as to 7 the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) 8 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). 9 “The mere existence of a scintilla of evidence in support of the plaintiff’s position will be 10 insufficient[.]” Anderson, 477 U.S. at 252. 11 Further, “when parties submit cross-motions for summary judgment, ‘[e]ach motion 12 must be considered on its own merits.’” Fair Hous. Council of Riverside Cnty., Inc. v. 13 Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (quoting William W. Schwarzer, et 14 al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 15 1992)) (citations omitted). “In fulfilling its duty to review each cross-motion separately, the 16 court must review the evidence submitted in support of each cross-motion.” Id. 17 IV. DISCUSSION 18 The Court addresses both motions together below because both ask the Court to 19 answer the same ultimate question. The Court first addresses Nevada Links’s evidentiary 20 objections and then addresses Plaintiff’s and Nevada Links’s arguments regarding the 21 trust relationship between Plaintiff and the County and Nevada Links’s liability. 22 A. Evidentiary Objections 23 Nevada Links objects to all of Plaintiff’s evidence submitted in support of its motion 24 for partial summary judgment and its opposition to Nevada Links’s motion for summary 25 judgment because Plaintiff failed to include any affidavit or declaration to authenticate its 26 exhibits. (ECF No. 145 at 33 n.16; ECF No. 160 at 1 n.1.) Plaintiff’s evidence consists of 27 deposition transcripts, responses to interrogatories, agreements, appraisal reports, 1 County documents, emails, and letters. (ECF Nos. 130-1, 143-1.) Nevada Links also 2 objects to Plaintiff’s Exhibit 16, an appraisal engagement letter from Matthew Lubawy to 3 the County, and Exhibit 24, revenue spreadsheets prepared by the County, as irrelevant. 4 (ECF No. 145 at 33 n.16.) Plaintiff counters that Federal Rule of Civil Procedure 56 no 5 longer requires authentication and that Plaintiff’s Exhibits 16 and 24 are indeed relevant 6 to its claim against Nevada Links because they relate to the Fourth Amendment. (ECF 7 No. 153 at 21-22.) As further explained below, the Court agrees with Plaintiff and may 8 consider all of Plaintiff’s evidence for summary-judgment purposes.5 9 1. Authentication 10 To argue that all of Plaintiff’s evidence is not properly authenticated, Nevada Links 11 primarily relies on the standard set forth in Orr v. Bank of America, which strictly requires 12 evidence to be properly authenticated and admissible in its present form for it to be 13 considered at the summary-judgment stage. (ECF No. 145 at 33 n.16 (citing Orr, 285 F.3d 14 at 773 (9th Cir. 2002)).) However, the 2010 amendments to Federal Rule of Civil 15 Procedure 56 “eliminate[d] th[is] unequivocal requirement” and mandate only that the 16 substance of the proffered evidence would be admissible at trial. Romero v. Nev. Dep’t 17 of Corr., 673 F. App’x 641, 644 (9th Cir. 2016); see also Fed. R. Civ. P. 56 advisory 18 committee’s note to 2010 amendment. The Court therefore agrees with Plaintiff’s reading 19 of Rule 56 and will not, as Nevada Links requests, disregard Plaintiff’s evidence solely for 20 lack of proper authentication because the substance of each proffered exhibit could be 21 admissible at trial. For instance, Plaintiff could reasonably call witnesses with personal 22 knowledge of its exhibits, which include, for example, appraisal reports, to testify as to 23 what each document is. (ECF Nos. 130-1, 143-1.) 24 /// 25 26 5In any case, the Court ultimately did not need to consider Plaintiff’s evidence 27 submitted in support of its motion for partial summary judgment and its opposition to Nevada Links’s motion for summary judgment to reach the decision here. 1 2. Relevance 2 Nevada Links argues that Plaintiff’s Exhibits 16 and 24 (ECF Nos. 130-17, 130-25) 3 are irrelevant to Plaintiff’s claim because Nevada Links is neither a sender nor a recipient 4 of these documents and each of the documents involve only the County and/or the United 5 States. (ECF No. 145 at 33 n.16.) Plaintiff counters that Exhibit 16 is relevant because it 6 demonstrates that the County worked with Plaintiff to determine the fair market value of 7 the Bali Hai property and that Exhibit 24 is relevant because it shows that “Nevada Links 8 had been paying rent, and that the County had been accepting rent payments, for all 9 periods since the execution of the Fourth Amendment.” (ECF No. 153 at 22.) 10 Under Federal Rule of Evidence 401, “[e]vidence is relevant if: (a) it has any 11 tendency to make a fact more or less probable than it would be without the evidence; and 12 (b) the fact is of consequence in determining the action.” First, Exhibit 16 involves a letter 13 that determined the scope of appraisal by Matthew Lubaway and was intended to be used 14 by the BLM and the County in establishing fair market rent. (ECF No. 130-17 at 2.) While 15 Nevada Links was not a sender nor recipient of the letter, the letter does tend to show the 16 significance of determining the fair market rent and that the County had a duty to lease 17 the property at fair market rent, which is a threshold issue that must be resolved before 18 reaching the question of whether Nevada Links’s had knowledge of a breach of that duty. 19 Next, Exhibit 24 does involve Nevada Links, who is listed in numerous spreadsheet 20 entries, and tends to show that Nevada Links had knowledge of its rental payments to the 21 County, which assuming the rental payments constitute below fair-market rent, tends to 22 go toward establishing that Nevada Links possessed knowledge of the County’s breach 23 of fiduciary duty. (ECF No. 130-25.) Accordingly, the Court finds that both Plaintiff’s 24 Exhibits 16 and 24 are relevant and may consider them in reviewing the remaining issues 25 raised in the motions. 26 /// 27 /// 1 B. Trust Relationship Between the United States and Clark County 2 Having resolved the evidentiary objections, the Court now addresses the merits of 3 Plaintiff’s and Nevada Links’s arguments. Plaintiff argues that a trust relationship arose 4 as a matter of law between the United States and the County by the Act and Deed. (ECF 5 No. 130 at 21-22.) Nevada Links does not address this argument in its opposition nor 6 make any arguments regarding the existence of a trust relationship in its motion for 7 summary judgment. (ECF Nos. 145, 134.) 8 Whether a trust relationship exists between the United States and the County 9 under the Act is a question of law that requires the Court to look to the common law of 10 trusts, determine whether Congress manifested an intent to create a fiduciary relationship 11 under the Act, and therefore look to the Act’s stated purpose and enumerated duties. See 12 Day v. Apoliona, 496 F.3d 1027, 1034 n.10 (9th Cir. 2007); Branson Sch. Dist. RE–82 v. 13 Romer, 161 F.3d 619, 633, 637 (10th Cir. 1998). The Court has already decided this 14 question of law in its prior order on Nevada Links’ motion to dismiss and found that 15 Congress manifested an intent to create a trust when it passed the Act and that a trust 16 relationship exists between the United States and the County. (ECF No. 50 at 9.) No 17 subsequent developments in the case have persuaded the Court otherwise, and 18 therefore, the Court continues to find that a trust relationship arose as a matter of law 19 between the United States and the County under the Act.6 As to this issue, the Court 20 accordingly grants Plaintiff’s renewed motion for partial summary judgment (ECF No. 130) 21 and denies Nevada Links’s motion for summary judgment (ECF No. 134). 22 C. Nevada Links’s Liability 23 Having established that a trust relationship exists between Plaintiff and the County, 24 the Court now turns to the question of Nevada Links’s liability. The Court first addresses 25 Plaintiff and Nevada Links’s disputes about the legal framework of liability for a breach of 26

27 6Because the Court so finds, it need not—and does not—address Plaintiff’s argument that the Deed operates as another basis for finding the trust relationship. 1 a trust-based fiduciary duty, then addresses their arguments about Nevada Links’s 2 liability. 3 Plaintiff argues that Nevada Links is equally liable as a transferee of and participant 4 in the County’s lease of property in violation of its trust duties because Nevada Links had 5 actual or constructive knowledge of the trust created by the Act and of the County’s 6 breach of that trust when it agreed to the Fourth Amendment. (ECF No. 130 at 24-26.) 7 Nevada Links affirmatively argues and counters that Nevada Links did not have actual or 8 constructive knowledge of the existence of the trust nor that the Fourth Amendment 9 breached a trust-based fiduciary duty. (ECF No. 134 at 26-28; ECF No. 145 at 22-28.) As 10 further explained below, the Court finds that only the “knowing transferee” theory of 11 liability applies here and that Nevada Links knew or should have known that a trust 12 relationship existed between Plaintiff and the County. But the Court denies summary 13 judgment because a genuine issue of material facts exists as to whether Nevada Links 14 knew of the County’s alleged breach of its fiduciary duty. 15 1. Legal Framework 16 Relying on standards set forth in Harris Tr. & Sav. Bank v. Salomon Smith Barney, 17 Inc., 530 U.S. 238 (2000) and Donovan v. Schmoutey, 592 F. Supp. 1361 (D. Nev. 1984), 18 respectively, Plaintiff argues that Nevada Links is liable for breach of trust under two 19 distinct theories of liability: (1) as a knowing transferee of a property interest conveyed by 20 the County in breach of trust and (2) as a knowing participant in the County’s breach of 21 trust. (ECF No. 130 at 24-26.)7 Nevada Links counters that Donovan did not create a 22 23 24 7Plaintiff also cites to Seminole Nation v. United States, 316 U.S. 286, 295-96 25 (1942), to support its argument of a distinct “knowing participant” theory under Donovan, The Court finds this argument unpersuasive and agrees with Nevada Links that Seminole 26 Nation concerned a third party who made payments to a fiduciary for the benefit of beneficiaries knowing that the fiduciary intended to steal the beneficiaries’ money, 27 circumstances that are not similar to nor relevant in Nevada Links’s case. (ECF No. 160 at 8 n.4.) 1 separate theory of liability but merely clarified the Harris formulation. (ECF No. 145 at 21- 2 22.) 3 The Court agrees with Plaintiff that these may be two distinct theories of liability; 4 however, the “knowing participant” theory under Donovan is functionally only distinct in 5 cases involving liability where the third party is a participant to the breach but not a 6 transferee, and therefore, the theories collapse into one in the case of a transferee. See 7 592 F. Supp. at 1396; Restatement (Second) of Trusts § 326 (1959) (“A third person who, 8 although not a transferee of trust property, has notice that the trustee is committing a 9 breach of trust and participates therein is liable to the beneficiary for any loss caused by 10 the breach of trust.”) (emphasis added). That is, being a transferee automatically satisfies 11 the “participation” prong of the “knowing participation” test under Donovan. See 592 F. 12 Supp. at 1396 (“[A]t common law, the receipt of trust assets by a third party [i.e., a 13 transferee] resulting from a fiduciary breach constitutes sufficient participation for 14 purposes of establishing knowing participation.”). Because it is undisputed that Nevada 15 Links is a transferee of a property interest—a leasehold interest—conveyed by the 16 County, the Court in effect agrees with Nevada Links to the extent that only the “knowing 17 transferee” theory of liability under Harris applies here. (ECF No. 130 at 10; ECF No. 134 18 at 13). 19 Under Harris, “when a trustee in breach of his fiduciary duty to the beneficiaries 20 transfers trust property to a third person, the third person takes the property subject to the 21 trust, unless he has purchased the property for value and without notice of the fiduciary’s 22 breach of duty.” 530 U.S. at 250 (2000). A transferee is liable, however, if he “knew or 23 should have known of the existence of the trust and the circumstances that rendered the 24 transfer in breach of the trust.” Id. at 251. 25 2. Knowledge of the Trust 26 As to the first prong of the “knowing transferee” standard, Plaintiff argues that 27 Nevada Links knew of the trust because it executed the Fourth Amendment, which 1 expressly “recognizes that the Premises are within property subject to the provisions of 2 the [Act] and that County is required by the [Act] to receive ‘fair market value’ for all 3 leases.” (ECF No. 130 at 24; ECF No. 1-5 at 11.) Nevada Links does not dispute that it 4 executed the Fourth Amendment and that the Fourth Amendment acknowledges the Act’s 5 requirement that the land be conveyed at fair market value, but counters that execution 6 of such an agreement is insufficient to show knowledge that the County held the land in 7 trust. (ECF No. 145 at 22.) 8 Nevada Links argues that it had no actual knowledge that a trust relationship 9 existed because: (1) the Lease makes no reference to a trust responsibility or fiduciary 10 duty; (2) no one from the County ever communicated to Nevada Links that the County 11 was a trustee or fiduciary of the conveyed land; and (3) Plaintiff never communicated to 12 Nevada Links that the County was a trustee or fiduciary. (ECF No. 134 at 27.) Nevada 13 Links further argues that there is no evidence from which the Court could infer that 14 Nevada Links should have known of the existence of a trust relationship because: (1) 15 prior to the Court’s ruling on Nevada Links’s motion to dismiss, no court had determined 16 whether the Act created a trust; (2) the Deed does not state that a trust relationship was 17 intended; (3) BLM’s website does not state that the Act creates a trust relationship; and 18 (4) two BLM employees who oversaw programming under the Act testified that they did 19 not believe or know whether the County was considered a trustee of the land.8 (Id. at 27- 20 28.) 21 While it may be true that there were no explicit references of a “trust” or “fiduciary 22 duty” made known to Nevada Links, the Court agrees with Plaintiff that Nevada Links’s 23 execution of the Fourth Amendment and its express terms sufficiently demonstrate that 24 25 8However, in the portion of BLM District Manager Tim Smith’s deposition testimony 26 that Nevada Links cites to, Smith first stated that “Clark County has a fiduciary relationship with the government as it relates to the sale, the lease, or other conveyance of the lands,” 27 and when later asked whether that “make[s] the County a trustee of the lands,” he answered, “I do not believe so.” (ECF No. 134 at 28; ECF No. 135-2 at 117.) 1 Nevada Links was aware of the County’s obligation to Plaintiff to lease the property at fair 2 market value. Such an obligation is fiduciary in nature, and therefore, the Court finds that 3 there is no genuine dispute of material fact that Nevada Links, as a sophisticated business 4 entity, knew or should have known that the County owed a fiduciary duty to Plaintiff and 5 that a trust relationship existed. Accordingly, as to this issue, the Court grants Plaintiff’s 6 renewed motion for partial summary judgment (ECF No. 130) and denies Nevada Links’s 7 motion for summary judgment (ECF No. 134). 8 3. Knowledge of the Breach of Trust-Based Fiduciary Duty 9 Turning to the second prong, Plaintiff argues that Nevada Links knew the rent term 10 of the Fourth Amendment violated the trust because Nevada Links had two appraisals 11 and a financial analysis that showed market rent exceeded $2 million and knew that the 12 County had done no appraisal at the time of its negotiations with the County over the 13 Fourth Amendment. (ECF No. 130 at 24-25.) On the other hand, Nevada Links argues 14 that it did not have knowledge that the Fourth Amendment breached the trust because: 15 (1) when the Fourth Amendment was executed, Bali Hai was $54 million underwater, had 16 generated no rent for the County, and was projected to never generate any rent under 17 the existing participatory rent structure; (2) the evidence reflects profound differences of 18 opinion among appraisal experts regarding fair market value; (3) the appraisal on which 19 Plaintiff based this lawsuit was not provided to Nevada Links and is irrelevant as a matter 20 of law; and (4) the Act and the Deed are silent on how fair market value is determined. 21 (ECF No. 134 at 29-35.) Consistent with the Ninth Circuit’s Memorandum, the Court must 22 decline to address Plaintiff’s and Nevada Links’s arguments on this issue. 23 In its Memorandum, the Ninth Circuit considered two arguments relating to the 24 interpretation of the Fourth Amendment, which this Court did not reach in its Prior Order: 25 (1) whether the fixed rent term of the Fourth Amendment went into effect and (2) if the 26 Fourth Amendment’s fixed rent term went into effect, whether it operated in tandem with, 27 or replaced, the participatory rent term in the Lease. (ECF No. 175 at 6-7.) The Ninth 1 Circuit held that because the Fourth Amendment is ambiguous as to both arguments, 2 these issues cannot be decided on summary judgment, and therefore remanded these 3 issues for trial. (Id. at 7-12.) Because, as the Ninth Circuit found, these issues go toward 4 whether there was a breach at all (e.g., “if the new fixed rent term did not go into effect, 5 … there could not have been a breach”), the question of whether Nevada Links had actual 6 or constructive knowledge of the County’s breach of fiduciary duty—and whether the 7 Court even needs to ultimately reach that question—necessarily depends on factual 8 findings that can only be determined at trial and cannot be answered at this stage. (ECF 9 No. 175 at 8.) The Court therefore finds that a genuine issue of material fact exists as to 10 Nevada Links’s knowledge of the County’s breach and denies the parties’ motions as to 11 this issue. 12 V. CONCLUSION 13 The Court notes that the parties made several arguments and cited to several 14 cases not discussed above. The Court has reviewed these arguments and cases and 15 determines that they do not warrant discussion as they do not affect the outcome of the 16 issues before the Court. 17 It is therefore ordered that Plaintiff’s renewed motion for partial summary judgment 18 (ECF No. 130) is granted in part and denied in part. It is granted as to Plaintiff’s claims 19 that the Act created a trust relationship between the United States and the County and 20 that Nevada Links knew or should have known of that trust relationship, as specified 21 herein. It is otherwise denied. 22 It is further ordered that Nevada Links’s motion for summary judgment (ECF No. 23 134) is denied. 24 It is further ordered that within 30 days from the date of entry of this order, Plaintiff 25 and Defendants must file a joint pretrial order. 26 /// 27 /// 1 DATED THIS 13*" Day of October 2022. 2

4 □□□□□□□□□□□□□□□□□□□□□□□ 5 CHIEF UNITED STATES DISTRICT JUDGE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15