First Amer. Kickapoo Operation v. Multimedia Games

• Decision Date: 22 June 2005
• Docket Number: No. 03-6283.,03-6283.
• Citation: 412 F.3d 1166
• Parties: FIRST AMERICAN KICKAPOO OPERATIONS, L.L.C., a Nevada Limited Liability Company, Plaintiff-Appellant, v. MULTIMEDIA GAMES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

412 F.3d 1166

FIRST AMERICAN KICKAPOO OPERATIONS, L.L.C., a Nevada Limited Liability Company, Plaintiff-Appellant, v. MULTIMEDIA GAMES, INC., Defendant-Appellee.

No. 03-6283.

United States Court of Appeals, Tenth Circuit.

June 22, 2005.

Harvey D. Ellis, Jr. (Jimmy K. Goodman and David V. Stewart with him on the brief), Crowe & Dunlevy, Oklahoma City, OK, for Plaintiff-Appellant.

John F. Heil, III (T. Lane Wilson with him on the brief), Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, OK, for Defendant-Appellee.

Before O'BRIEN, PORFILIO, and McCONNELL, Circuit Judges.

McCONNELL, Circuit Judge.

Plaintiff First American Kickapoo Operations appeals the district court's grant of summary judgment on its claim for tortious interference with contract. We AFFIRM.

I. Factual Background

The Indian Gaming Regulatory Act ("IGRA") establishes a statutory basis for the operation and regulation of gaming by Indian tribes to "promot[e] tribal economic development, self-sufficiency, and strong tribal governments," while simultaneously "shield[ing tribes] from organized crime and other corrupting influences [and] ensur[ing] that . . . Indian tribe[s are] the primary beneficiar[ies] of . . . gaming operations." 25 U.S.C. § 2702. The IGRA effects these goals in part by providing for federal oversight of contracts between tribes and non-tribal entities for the management of tribal gaming operations. Tribes may enter into contracts for the management of these gaming operations only with the approval of the National Indian Gaming Commission ("NIGC") Chairman. 25 U.S.C. § 2711(a)(1).¹ Unapproved management contracts are void, 25 C.F.R. § 533.7, and a gaming operation that violates any provision of the IGRA is subject to closure and fines of up to $25,000 per violation. 25 U.S.C. § 2713.

On April 30, 2001, the Kickapoo Tribe of Oklahoma entered into an Operating Lease Agreement with First American. The Operating Lease provided for constructing, equipping, and operating a Class II casino on tribal land.² First American agreed to construct the casino and lease all the gaming equipment it required. The Tribe agreed to repay, without interest, the costs of construction, although First American guaranteed a monthly payment to the Tribe of $20,000 which took precedence over repaying the construction loan. In return for lease of the gaming equipment, First American was to be paid forty percent of the operation's net revenues. First American indicates that it spent $859,545.90 "establishing and developing" the casino, which opened May 23, 2001. On June 13, 2001, the NIGC notified the Tribe that its gaming ordinances did not comply with the requirements of the IGRA. The Tribe voluntarily closed the casino, and on June 30, 2001 passed gaming ordinances that subsequently met with NIGC approval. Also in June 2001, the Tribe submitted the Operating Lease to the NIGC for an opinion as to whether the Operating Lease was a management contract requiring NIGC approval. In a letter dated June 29, 2001, Deputy General Counsel for the NIGC offered her opinion that the Operating Lease was a management contract. On July 27, 2001, the Tribe's business committee unanimously decided to terminate the Tribe's relationship with First American. On August 17, 2001, the Tribe executed a letter of intent with Multimedia Games, and subsequently entered into a non-exclusive agreement to rent gaming equipment from Multimedia.

II. Procedural History and Standard of Review

The Operating Lease provides that any claim arising out of or related to it must be adjudicated in the Tribe's courts; First American has brought suit against the Tribe in tribal court. Art. 11(A). In addition, First American filed suit against Multimedia in Oklahoma state court, requesting injunctive relief and damages for tortious interference with contractual and business relations. Multimedia removed the case to federal court, where First American's motion for a preliminary injunction was denied.

In March 2002, Multimedia moved for summary judgment on First American's claim of tortious interference with contract, arguing that the Operating Lease fell within the regulations' definition of a management contract and was therefore void for lack of NIGC approval. Multimedia maintained that a void contract cannot serve as a predicate for a claim for tortious interference with contract and that summary judgment was therefore appropriate on this claim. The district court denied the motion in May 2002, holding that "the language of the Operating Lease is ambiguous with respect to whether that agreement provides for management of [the gaming operation] by First American." Order of May 8, 2002 at 3.

On the same day in June 2003, both parties moved for summary judgment. First American urged the court to find that any provisions in the Operating Lease providing for management were severable, and that the remainder constituted a valid construction loan and equipment lease. Multimedia moved for summary judgment on both the tortious interference with contract and tortious interference with business relations claims, but on grounds unrelated to the validity of the Operating Lease. The district court denied both motions on July 17, 2003, holding with regard to First American's motion that the operation of a severability clause in the Operating Lease depended on the parties' intentions and other disputed fact questions. Neither party moved for summary judgment again.

While the district court never explicitly revised its holding that the Operating Lease was ambiguous, between July and September 2003 the district court and the parties appear to have experienced a change of mind on the issue. In an order following a pretrial conference, the district court stated that "[t]he parties are in agreement that the determination as to whether the agreement is a management contract is a question of law for the court." Order of Sept. 2, 2003 at 3. The district court invited the parties to submit whatever extrinsic evidence they thought relevant to the question. The court determined the Operating Lease to be an unapproved management contract and therefore void, "leav[ing] the plaintiff with a claim based on the existence of a `business relationship.'" Order of Sept. 6, 2003 at 3. First American accordingly tried its remaining claim for tortious interference with business relations to a jury, which found for Multimedia.

First American appeals the district court's order rejecting its claim for tortious interference with contractual relations. First, it argues that the Operating Lease is ambiguous and on that account should have been interpreted by a jury. Second, even if the language of the Operating Lease is unambiguous and therefore suitable for interpretation as a matter of law, First American maintains that the district court should have found the Operating Lease not to be a management contract. Third, even if the lease is an unapproved management contract, First American insists that it can nevertheless form the basis for a suit for tortious interference with contract. Finally, First American urges that we sever those portions of the contract which might make it a management contract, leaving the remainder of the contract to furnish a basis for its claim for tortious interference with contract.

The district court did not specify the legal nature of its September 6, 2003 order rejecting First American's claim for tortious interference with contract. We conclude, however, that the court granted summary judgment. The order essentially adopts the reasoning put forward by Multimedia's briefs in support of its first motion for summary judgment, suggesting that the district court regarded its order of September 6 as a grant of summary judgment. Moreover, the order does not resolve any disputed questions of fact.

To be sure, we cannot tell whether the September 6 order was in the nature of a reconsideration of the district court's order of May 8, 2002 denying Multimedia's first motion for summary judgment, or whether it was a sua sponte grant of summary judgment. Ultimately, this does not matter, because either approach would be permissible. A court's disposition of a single claim in a suit involving multiple claims is subject to reconsideration until the entry of judgment on all of the claims, absent an explicit direction for the entry of judgment on the single claim. Fed.R.Civ.P. 54(b); see also Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 12, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ("[E]very order short of a final decree is subject to reopening at the discretion of the district judge."); Paramount Pictures Corp. v. Thompson Theatres, Inc., 621 F.2d 1088, 1090 (10th Cir.1980) ("[T]he court retains the power to alter rulings until final judgment is entered on a cause.").

The district court could also have granted summary judgment sua sponte. While we do not encourage the practice of granting summary judgment sua sponte, we will not reverse absent evidence of prejudice. So long as "the losing party was on notice that [it] had to come forward with all of [its] evidence," a sua sponte grant of summary judgment may be appropriate. Ward v. Utah, 398 F.3d 1239, 1245-46 (10th Cir.2005) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Since Multimedia's first motion for summary judgment was argued on precisely the grounds ultimately adopted by the district court, First American was on notice to provide all of its evidence relevant to this argument. Moreover, before ruling on whether the Operating Lease was a management contract—the same ruling that disposed of the tortious interference with contract claim—the district court invited the parties to proffer any extrinsic evidence they thought relevant to this question. Order of Sept. 2, 2003 at 2.

While it would have facilitated appellate review for the district court to be more explicit about what it...