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SCUTTI ENTERPRISES, LLC v. PARK PLACE ENTERTAINMENT CORP.

August 18, 2005.

SCUTTI ENTERPRISES, LLC, Plaintiff,
v.
PARK PLACE ENTERTAINMENT CORPORATION and PARK PLACE AKWESASNE CONSULTING CORP., Defendants.



The opinion of the court was delivered by: MICHAEL TELESCA, Senior District Judge

DECISION and ORDER

INTRODUCTION

On November 1, 2001, plaintiff Scutti Enterprises, LLC, ("Scutti") brought this action pursuant to several provisions of New York statutory and common law claiming that the defendants Park Place Entertainment Corp., and Park Place Akwesasne Consulting Corp. (collectively "Park Place") tortiously interfered with Scutti's contractual and prospective business relations, engaged in unfair competition, and engaged in anticompetitive behavior in violation of the Donnelly Act.

  By Decision and Order dated March 11, 2002, I found that plaintiff had failed to state a cause of action under any of its alleged theories of liability, and granted defendants' motion to dismiss the Amended Complaint. Plaintiff appealed my March 11, 2002 Decision and Order, and by Decision and Order dated February 28, 2003, the Second Circuit Court of Appeals affirmed in-part and vacated and remanded in-part my previous determination. Specifically, the Court of Appeals affirmed my dismissal of plaintiff's tortious interference with contractual relations claims, as well as claims of unfair competition and violations of the Donnelly Act. The Second Circuit, however, vacated and remanded for further proceedings my dismissal of plaintiff's claim for tortious interference with prospective business relations. The Court of Appeals held that plaintiff had stated a prima facie case of tortious interference with prospective relations, (the "tortious interference" claim) and therefore, that claim only was not subject to dismissal pursuant to Rule 12(b). Upon remand, the parties engaged in discovery with respect to the sole remaining claim of tortious interference.

  By motion dated November 18, 2004, defendants now move for summary judgment with respect to plaintiff's claim for tortious interference. Specifically, defendants contend that there are no material facts in dispute, and that based on the uncontroverted facts, they are entitled to judgment in their favor. Plaintiff opposes defendants' motion. For the reasons set forth below, and after reviewing the facts in the light most favorable to the plaintiff, I find that no reasonable jury could find that the plaintiff could prevail on its claim for tortious interference. Accordingly, I grant defendants' motion for summary judgment. BACKGROUND

  The factual background of this action was set forth in detail in my March 11, 2002, Decision and Order. The salient facts, with additional facts germane to this motion, are set forth below.

  In 1985, members of the Mohawk tribe ("the Mohawks" or "the Tribe") built a 35,000 square foot Class II gaming facility known as the "Bingo Palace" on the St. Regis Mohawk Indian Reservation located in Akwesasne, (formerly known as Hogansburg), New York. A Class II gaming facility may offer games such as bingo, and may offer video slot machines, but may not offer table games such as blackjack. See 25 U.S.C. § 2703(7) (defining term "Class II gaming"). In addition to bingo and other permissible games, there are 127 slot machines located at the Bingo Palace.

  During the mid 1990's, Scutti sought investment opportunities in connection with Indian gambling casinos. Fedele Scutti, the principle of Scutti Enterprises, met with the then-current owners of the Bingo Palace to discuss expansion opportunities. In 1995, the Mohawk tribe took control of the Bingo Palace from the original owners, but continued to negotiate with Scutti.

  Thereafter, on October 7, 1997, Scutti submitted to the Mohawks a Proposed Management Contract to manage the Bingo Palace and to consult with the Tribe on gaming issues. Under the terms of the contract, Scutti agreed to provide the Mohawks with $3 million of capital advances for renovations to the Bingo Palace. In return, the Tribe agreed to give Scutti 25% of the profits from the Casino, and to pay back the loan. The Proposed Management Contract was to run for five years, with a two-year renewal period.

  Neither the Proposed Management Contract nor the First Amended Proposed Management Contract were ever approved by the National Indian Gaming Council, and therefore, pursuant to the Contract's provisions, never became legally binding on the Tribe or Scutti.

  In April, 1998, pursuant to the terms of the 1997 Proposed Management Agreement, plaintiff submitted a business plan to the Mohawk tribe which proposed a major remodeling of the Bingo Palace budgeted at $4.3 million. The business plan also proposed converting the Bingo Palace from a Class II gaming facility to a Class III facility, which would allow the facility to also offer table games such as blackjack.

  Shortly after the 1997 Proposed Management Agreement was approved by the Mohawks, the Mohawks commenced construction of a new casino, the Akwesasne Mohawk Casino, (the "Akwesasne"), on the St. Regis Mohawk Reservation, not more than 20 miles from the existing Bingo Palace Casino. See Complaint at ¶ 40. Plaintiff contends that this casino, which was operated by the management company President R.C. St. Regis LLC, ("President"), was built as result of a "rift" within the Tribe. Id.

  Despite the fact that the Mohawks began building a new casino in close proximity to the Bingo Palace, Scutti and the Mohawks reaffirmed their relationship in October 1998, when they entered into a First Amended Proposed Management Contract, which essentially recited the terms of the original Proposed Management Agreement.

  The Akwesasne Mohawk Casino opened in April 1999, and immediately experienced a number of problems due to poor physical construction of the building, and mismanagement. Plaintiff alleges that in the summer of 1999, President met with Park Place to discuss the possibility of Park Place taking over management of the Akwesasne Mohawk Casino in exchange for President's introducing Park Place to the Mohawks. Plaintiff contends that President wanted Park Place to buy out President's interest in the Akwesasne, and that Park Place wanted an ...


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