Turn Key Gaming, Inc. v. Oglala Sioux Tribe
| Decision Date | 08 January 1999 |
| Docket Number | No. 97-3283,97-3283 |
| Citation | 164 F.3d 1080 |
| Parties | TURN KEY GAMING, INC., Plaintiff, Miller & Schroeder Investments Corp., Appellant, v. OGLALA SIOUX TRIBE, Defendant--Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Thomas W. Stanton, Rapid City, SD, argued, for Appellant.
Robert Gusinsky, Rapid City, SD, argued (Donald R. Shultz and Jay C. Schultz, Rapid City, SD, on the brief), for Appellee.
Before BOWMAN, Chief Judge, RICHARD S. ARNOLD and MORRIS SHEPPARD ARNOLD, Circuit Judges.
Miller & Schroeder Investment Corp. appeals the District Court's denial of its application to intervene as of right under Fed.R.Civ.P. 24(a). We hold that Miller & Schroeder has satisfied the requirements of Rule 24(a), and we therefore reverse.
The pending lawsuit involves a dispute over a Management Agreement between Turn Key Gaming, Inc., and the Oglala Sioux Tribe, under which Turn Key was to develop, construct, and manage a gaming facility on Oglala Sioux tribal lands. All costs of constructing and equipping the project were to be advanced by Turn Key and repaid out of the revenues from operations according to a set formula. To finance the project, the principal stockholders of Turn Key agreed to borrow up to $4,000,000 from Miller & Schroeder, of which approximately $2.65 million has already been advanced. The project experienced significant cost overruns, and Turn Key sent a change order to the Tribe requesting that it approve an increase in construction costs. The Tribe refused, and Turn Key ceased work on the project. The Tribe then declared Turn Key in default and terminated the Agreement. In the Notice of Termination, the Tribe declared its intention to operate the casino for its own account without any obligation or liability to Turn Key. Turn Key filed suit alleging breach of contract and unjust enrichment. The Tribe counterclaimed for breach of contract and breach of fiduciary duty. Miller & Schroeder then filed an application to intervene pursuant to Fed.R.Civ.P. 24(a).
Miller & Schroeder's motion to intervene and proposed complaint alleged that it had a security interest in all of the property purchased with the proceeds from the loan which had been used to furnish and construct the casino, as well as in the revenues generated by the casino. Miller & Schroeder relies on a number of agreements in support of this allegation. First is a Promissory Note Master Installment Note 1 in which the Tribe agreed to pay Turn Key up to $4,000,000 from the revenues of the casino operations in accordance with the formula set out in the Management Agreement; second is a Security Agreement and Financing Statement wherein the Tribe granted a security interest in all furniture, supplies, inventory, and cash of the casino to Turn Key to secure payment of the Tribe's Note; and third is an agreement entitled Consent and Estoppel of the Oglala Sioux Tribe, in which the Tribe agreed to remit all payments due under its Note directly to Miller & Schroeder and acknowledged that Turn Key had assigned its rights under the Tribe's Note and Security Agreement to Miller & Schroeder. The motion further averred that the disposition of the suit between the Tribe and Turn Key could, as a practical matter, impair or impede Miller & Schroeder's ability to protect its interest, in that the Tribe had taken possession of the casino for its own account and had denied that the Note, Security Agreement, and Consent and Estoppel were enforceable. Finally, the motion argued that the interest of Miller & Schroeder may not be adequately represented by Turn Key, since the primary issues in the existing action concern whether the Management Agreement was broken and whether either party is entitled to damages.
Under Rule 24(a) of the Federal Rules of Civil Procedure, a party will be permitted to intervene in an action "when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the...
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