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BGA, LLC v. Ulster County

August 23, 2010

BGA, LLC AND THE WESTERN MOHEGAN TRIBE & NATION OF THE STATE OF NEW YORK, PLAINTIFFS,
v.
ULSTER COUNTY, NEW YORK, DEFENDANT.



The opinion of the court was delivered by: Gary L. Sharpe District Court Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction

Plaintiffs BGA, LLC and The Western Mohegan Tribe and Nation of the State of New York brought this action against Ulster County, New York. They allege breach of contract and a violation of the Nonintercourse Act,*fn1 and seek damages, specific performance, and declaratory and injunctive relief. (Compl., Dkt. No. 1.) Pending are the County's motion to dismiss plainttiffs' complaint pursuant to FED. R. CIV. P. 12(b)(1) and for summary judgment pursuant to FED. R. CIV P. 56(c). (Dkt. No. 48.) For the reasons that follow, the County's motion to dismiss is denied, but its motion for summary judgment is granted.

II. Background

A. The Agreement

Plaintiff Tribe is a group of American Indians that calls itself the "Western Mohegan Tribe and Nation of the State of New York." On January 5, 2001, the Tribe entered into an agreement with defendant Ulster County to purchase a parcel of land known as the "Tamarack property." (See Def. SMF ¶ 4, Dkt. No. 48:15.) The County conveyed the property in consideration for, inter alia, the settlement of the Tribe's pending land claims against the County, as well as the payment of $900,000 in satisfaction of past real estate tax liens on the property, which plaintiff BGA*fn2 advanced on the Tribe's behalf. (Id.; see also Compl. ¶¶ 60-61, Dkt. No. 1.) The agreement was authorized by the Ulster County Legislature in Resolution Number 376 (the Resolution). (Id. at¶ 22.) In relevant part, the Agreement provides as follows:

A. Agreement of the Parties

1. Agreements of the County

In consideration of the payment of $900,000 by the Tribe and in full and complete satisfaction and settlement of any and all claims which the Tribe may have against the County or any other property owners as to lands in Ulster County ,... the County ... has:

(a) Adopted a resolution authorizing this Agreement to include the following matters (collectively, the "Resolutions"), in form and substance substantially as follows:

....

(ii) The County shall agree and accept in full consideration of the payment of any and all taxes, liens and other obligations due and owing as of the date hereof to the County ... in respect of the Subject Property, the aggregate sum of $900,000, and the payment of current years school and general property taxes[,] ... which the tribe will pay on closing ....

(iii) To the extent it is so authorized, the County agrees and accepts that the uses and purposes of the Real Property as may be placed in Trust as Indian Country shall be solely determined by the traditional government of the Tribe.

(iv) Except for the current year's school and general property taxes, ... which the tribe will pay on closing, the County shall release the Tribe from any and all taxes, liens and other obligations due and owing to the County or any other local County governmental agency in respect of the Real Property and understands that the property may be tax exempt in future tax years in which event the Tribe agrees to make payments in lieu of taxes to the County for any tax year in which the property is tax exempt .... (Mandell Aff., Ex. B, Agreement and Mutual Release, Dkt. No. 48:2.) The agreement further sets forth the terms governing the making of "PILOT payments," or the "payments in lieu of taxes," referenced in § A(1)(a)(iv). Specifically, the agreement provides that "[o]n or before March 1 of every tax year that the property is exempt from payment of property taxes, the Tribe shall deliver to the County Treasurer the [PILOT payment required under the Agreement]," which is to be "the greater of $25,000 per year or five percent ... of the annual 'net revenues' ... generated by the Tribe from activities in which it may engage on the Real Property, up to a maximum of $250,000 per annum." (Id. at §§ A(1)(a)(iv)(1),(2).)

B. Factual History and Prior Proceedings

In 2002, the Tribe submitted to the County a $25,000 PILOT payment in lieu of that year's property taxes. (See Compl. ¶ 72, Dkt. No. 1; Answer ¶ 1, Dkt. No. 6.) In a letter dated January 17, 2003, the Ulster County Treasurer's Office, relying on the 2001 agreement, rejected the payment and demanded that the 2002 property tax in the amount of $58,436.85 be paid. (MandellAff., Ex. G, Letter at 1, Dkt. No. 48:3.) According to the County, the agreement did not obligate it to accept a PILOT payment until the property became tax exempt, which it had not. (See Def. Mem. of Law at 27, Dkt. No. 48:14; see also Def. SMF ¶¶ 27-29, Dkt. No. 48:15.)

In 2004, after the Tribe had refused to pay the regular taxes on the property, the County applied for a tax foreclosure judgment in Ulster County Court. In granting the application, Judge Michael Bruhn found that the property was not immune from taxation and foreclosure, either on the basis of the Tribe's alleged sovereignty or under the 2001 Agreement. (See Mandell Aff., Ex. P, Judgment of Foreclosure at 1-3, Dkt. No. 48:10.)

In 2006, BGA and the Tribe commenced an action in this court against the County, the County Clerk, and the County Treasurer, alleging breach of contract, and seeking federal recognition of the Tribe's sovereignty as an Indian Nation and exemption from future taxation of tribal property in Ulster County. See BGA, LLC v. Ulster County, N.Y., No. 1:06-CV-0095, 2007 WL 2454220 (N.D.N.Y. Aug. 23, 2007). During the pendency of that litigation, however, the parties entered into a settlement agreement which provided that the Ulster County Court foreclosure judgment would be treated as null and void,*fn3 and that plaintiffs would discontinue their claims for monetary damages and pursue only their request for declaratory relief. (See Mandell Aff., Ex. C, Settlement Agreement at 2-3, Dkt. No. 48:2.) Plaintiffs amended their complaint accordingly. BGA, LLC, 2007 WL 2454220, at *1 n.5.

Subsequently, on August 23, 2007, this court dismissed plaintiffs' amended complaint for lack of subject matter jurisdiction, holding that no genuine case or controversy existed. See id. at *2. On motion for reconsideration, this courtaffirmed that decision and further held that, regardless of whether a justiciable controversy existed, it declined to exercise jurisdiction over the declaratory judgment action. BGA, LLC v. Ulster County, N.Y., No. 1:06-CV-0095, 2008 WL 84591, at *1-3 (N.D.N.Y. Jan. 7, 2008). The Second Circuit affirmed the dismissal of plaintiffs' claims. BGA, LLC v. Ulster County, N.Y., 320 Fed. Appx. 92 (2d. Cir. 2009).

C. Current Action

On February 8, 2008, the Tribe and BGA commenced the present action against the County, alleging breach of the January 5, 2001 Agreement between the Tribe and the County, and a violation of the Nonintercourse Act. (See Compl., Dkt. No. 1.) Plaintiffs also seek a declaration that the Tribe is a sovereign Indian Nation and that the Tamarack property is "Indian Country." (See id.) Relatedly, in addition to monetary damages, plaintiffs seek specific performance of the 2001 Agreement and an injunction prohibiting the County from seeking to collect taxes or payments other than the PILOT payments set forth in the Agreement. (See id.) The County now moves to dismiss plaintiffs' complaint pursuant to FED. R. CIV. P. 12(b)(1) and for summary judgment pursuant to FED. R. CIV P. 56. (See Dkt. No. 48.)

III. Standards of Review

The standards for judgment pursuant to Federal Rules of Civil Procedure 12(b)(1) and 56 are well established and will not be repeated here. For a full discussion of the standards, the court refers the parties to its previous opinions in Bain v. Town of Argyle, 499 F. Supp. 2d 192, 194-95 (N.D.N.Y. 2007) (Rule 56); and Hunt v. United ...


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