Blackfeet Tribe Reservation v. Blaze Construction
| Decision Date | 08 August 2000 |
| Docket Number | No. CV-95-082-GF-RFC.,CV-95-082-GF-RFC. |
| Parties | The BLACKFEET TRIBE OF THE BLACKFEET INDIAN RESERVATION, in its own behalf and on behalf of its tribal program, The Blackfeet Home Program, and The Blackfeet Home Program, Inc., Plaintiffs, v. BLAZE CONSTRUCTION, INC.; Lodgebuilder Management, Inc.; and National Union Fire Insurance Company of Pittsburgh, PA, Defendants, and National Union Fire Insurance Company of Pittsburgh, PA., Third Party Plaintiff, v. William H. Aubrey, Sun All, Inc., Sage Farm Investments, Inc., and Babb, Inc., Third Party Defendants. |
| Court | U.S. District Court — District of Montana |
William J. Gregoire, Stephanie A. Hollar, Smith, Walsh, Clarke & Gregoire, Great Falls, MT, for United States, ex. rel., plaintiff.
Ward E. Taleff, Alexander Baucus Taleff & Paul, Great Falls, MT, for Blaze Construction Inc., defendant.
Gary M. Zadick, Ugrin, Alexander, Zadick & Higgins, PC, Great Falls, MT, Laurence M. McHeffey, McElroy, Deutsch & Mulvaney, Denver, CO, Louis A. Modugno, James M. Mulvaney, McElroy, Deutsch & Mulvaney, Morristown, NJ, for National Union Fire Insurance Company of Pittsburgh, PA, defendant.
James M. Mulvaney, McElroy, Deutsch & Mulvaney, Morristown, NJ, for National Union Fire Insurance Company of Pittsburgh, PA, cross-claimant.
Frank C. Porada, Laurence M. McHeffey, McElroy, Deutsch & Mulvaney, Denver, CO, James M. Mulvaney, McElroy, Deutsch & Mulvaney, Morristown, NJ, for National Union Fire Insurance Company of Pittsburgh, PA, third-party plaintiff.
This case arose from disputes relative to various contracts and agreements involving the construction, administration and management of homes on the Blackfeet Indian Reservation. Plaintiffs, the Blackfeet Tribe of the Blackfeet Indian Reservation, in its own behalf and on behalf of its tribal programs, The Blackfeet Home Program and the Blackfeet Home Program, Inc. (collectively "plaintiffs"), instituted the above-entitled action against defendants, Blaze Construction, Inc. ("Blaze"), Lodgebuilder Management, Inc. ("Lodgebuilder") and National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), seeking monetary damages. In their Third Amended Complaint, plaintiffs allege nineteen separate counts. Plaintiffs allege National Union is liable for the following:
1) Blaze's alleged breach of the 1992 Contract by its failure to, among other things, provide private mortgage financing for all tenants and to provide a $1.3 million fund for management and administration (Count One);
2) Blaze's alleged breach of warranty under the 1992 Contract because the homes were not built for the particular purpose for which Blaze represented them to be (Count Two);
3) Blaze's alleged negligence in performing the 1992 Contract (Count Three);
4) Blaze's alleged breach of warranty under the 1992 Contract because the homes were not built in a workmanlike manner (Count Four);
5) Lodgebuilder's alleged breach of the Management Contract (Count Six) 6) Blaze and Lodgebuilder's alleged breach of contract in failing to manage the Home Units and Last Star Units in accordance with good management practices (Count Seven);
7) Blaze and Lodgebuilder's alleged negligence in managing the home units and the Last Star units (Count Eight);
8) Blaze's alleged breach of the 1994 Contract (Count Nine); and
9) Blaze's alleged negligence and breach of contract in designing the home units (Counts Ten and Eleven).
In addition to the foregoing counts, plaintiffs further allege Blaze and Lodgebuilder are liable for the following:
1) Blaze's alleged conversion of Super Good Cents funds (Count Five);
2) Blaze and Lodgebuilder's alleged conversion of property and equipment belonging to plaintiffs (Count Thirteen);
3) Aubrey's alleged fraudulent representations to plaintiffs (Count Fourteen);
4) Aubrey's alleged negligent misrepresentations to plaintiffs (Count Fifteen);
5) alleged bad faith in constructing, administering and managing the Blackfeet Home Project and the Last Star Project (Count Sixteen);
6) allegedly presenting false payment vouchers in violation of 25 U.S.C. § 88 (Count Seventeen);
7) alleged RICO violations (Count Eighteen); and
8) punitive damages based on alleged acts of malice, recklessness, oppression and fraud (Count Nineteen).
National Union, Blaze and Lodgebuilder have alleged counterclaims seeking monetary damages based upon plaintiffs' purported breach of contract, breach of the implied covenant of good faith and fair dealing and interference with contract.
Presently before the court are: (1) National Union's motion for summary judgment with regard to all counts asserted against it; and (2) the motion of Blaze and Lodgebuilder for summary judgment with regard to all counts asserted against them.
Having reviewed the record, together with the parties' briefs in support of their respective positions, the court is prepared to rule.
In 1992, William Aubrey, an enrolled member of the Blackfeet Tribe and co-owner of Blaze, approached the Blackfeet Tribal Business Council, the Tribe's governing body, proposing that the Tribe submit grant applications to the United States Department of Housing and Urban Development ("HUD") for funds under HUD's "Indian HOME Program."
On April 30, 1992, the 90'-92' Tribal Council voted to permit Blaze to submit a Partnership Program grant application to HUD. Thereafter, the Council decided that Blaze would not only be responsible for submitting the grant applications, but that Blaze would also be responsible for the "complete project through to final completion with the approved budgetary limits." The Council decided, however, that the Blackfeet Tribe would have auditing and monitoring authority throughout the project.2
After the 92'-94' Council was elected, Blaze requested permission to submit more than one grant application on behalf of the Blackfeet Tribe. On July 22, 1992, the 92'-94' Council decided to permit Blaze to submit more than one grant application.
On or about August 15, 1992, Earl Old Person executed, on behalf of the Blackfeet Tribe, a HUD grant application ("1992 Grant Application"), which was subsequently submitted to HUD's Denver office.
At or about the time the Blackfeet Tribe submitted the 1992 Grant Application, the 92'-94' Council created the Blackfeet Home Project ("Home Program"), a nonprofit organization, to administer the HUD grant awards, if any. According to the 92'-94' Council, the Home Program was the project sponsor/developer and was to be responsible for overseeing and managing all phases of the project through its completion. Specifically, the Home Program was responsible for "tenant selection, tenant collection, education, training, plans, specifications, bids, contracts, inspections, all monitoring, audits, maintenance, financing and any other areas of control." On October 6, 1992, Joe McKay and Cynthia Kipp, two members of the 92'-94' Council, became co-directors of the Home Program and were authorized by the 92'-94' Council to sign all pertinent documents required to implement the Home Program.
In or about early October 1992, HUD notified the Blackfeet Tribe that it had been awarded two grants. The first grant, No. M92IG910002, was in the amount of $2,523,000 for the construction of approximately 33 homes. The second grant, No. M92IG10003, was in the amount of $2,993,538 for the construction of approximately 35 homes. As a result, the Blackfeet Tribe received total 1992 grant awards in the sum of $5,516,538.
In its award letters to the Blackfeet Tribe, HUD advised the Blackfeet Tribe that the "Home Investment Partnership Act Grant Agreement (form HUD-52570) which, together with [the 1992 Grant Application] and the regulations at 24 C.F.R. Part 92, Subpart M, constitute the contract between HUD and the Blackfeet Tribe."
After the Blackfeet Tribe received the grant award notices, it requested proposals for construction of the housing units. On October 19, 1992 the Blackfeet Tribe issued an amended Notice to Bidders ("Notice") that provided, in pertinent part, that the Blackfeet Tribe sought bids for general construction of 72 dwelling units. The Notice also provided that potential bidders had an option and were encouraged to submit an "Innovative Proposal" that considered "innovative means of assistance to the Tribe in all forms of management, long and short term."
In response to the Notice, Blaze, the sole bidder, submitted two proposals. One proposal, which was dated November 6, 1992, was entitled "Form of Proposal." In the Form of Proposal, Blaze offered to construct seventy-two (72) housing units for a Total Development Price of $5,990,000. The Total Development Price included dwelling and non-dwelling construction and equipment, allowances, taxes and "other."
The second proposal was entitled "Innovative Proposal." Blaze proposed that it would "design, construct, manage, counsel tenants, monitor tenant payments and tenant property upkeep, financing, closing and other mortgage requirements, audits, accounting and turn over to tenants for a cost of $87,000 per unit." The Innovative Proposal provided, in relevant part, that Blaze would, without financial assistance from the Blackfeet Tribe, construct 72 homes, "obtain and manage all other (non-government) monies or contributions required for additional units beyond the 63 homes funded by" the 1992 HUD home grants. The Tribe accepted the Innovative Proposal.
On or about December 2, 1992, the Home Program and Blaze executed a Form of Contract. The Innovative Proposal was an addendum to the Form of Contract and was incorporated by reference therein. Also on December 2, 1992, Blaze and the Home Program executed a Blackfeet Home Program...
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