The La Posta Casino was located in Boulevard, California. It closed in October 2012. Photo: La Posta Casino

Business Deals | California | Litigation

Yavapai-Apache Nation wins $48.9M court judgment against La Posta Band

Friday, June 30, 2017

The Yavapai-Apache Nation has once again prevailed in a long-running gaming dispute with the La Posta Band of Diegueno Mission Indians.

The Yavapai-Apache Nation helped finance the La Posta Band's small gaming facility in California with the hopes of sharing in the revenues. But the La Posta Casino was never successful after opening in 2007.

Despite attempts to turn the business around, the casino shut down in October 2012. And the La Posta Band was never able to make payments on a $23 million loan owed to the Yavapai-Apache Nation.

That's when the Yavapai-Apache Nation went to court. After a trial, a jury ruled that the La Posta Band indeed had to repay the loan, plus interest, which at the time of the October 2014 decision came to $44,470,704.98.

Nearly three years later, the amount has grown to $48,893,407.97. This time it's appeals court in California confirming the La Posta Band has to pay up.

"Although La Posta made efforts to reduce costs and obtain more customers, the casino was ultimately unsuccessful and La Posta never made any payments under the loan agreement," Judge Judith L. Haller wrote in the 43-page opinion on Wednesday.

The La Posta Band received $225,891.27 from the Indian Gaming Revenue Sharing Trust Fund in the quarter that ended March 30, 2017. The amount was less than the $275,000 the tribe was expected to receive due to shortfalls in the fund. Source: California Gambling Control Commission

Without a steady source of income, the La Posta Band has little chance of paying the judgment. That's why the Yavapai-Apache Nation is seeking to take the tribe's share of a gaming revenue fund in California.

The Indian Gaming Revenue Sharing Trust Fund was set up to benefit tribes without casinos or those with small facilities. The La Posta Band is supposed to receive about $1.1 million every year, although the amount has fallen due to shortfalls in the fund.

Under the loan agreement, the Yavapai-Apache Nation can only secure the funds if the La Posta Band engaged in "fraud." The jury in California specifically found that wasn't the case.

But the money is still on the table because the Yavapai-Apache Nation is keeping the fraud issue alive with a lawsuit in its tribal court system in Arizona. A trial took place in November but a decision hasn't been issued, according to the California decision.

The Yavapai-Apache Nation, which operates the Cliff Castle Casino, is also owed money from the Iipay Nation of Santa Ysabel, another California tribe whose casino failed. The Yavapai-Apache Nation has secured a judgment in California to take the Iipay Nation's share of the trust fund.

"Staff recommends that the distribution allocated to the Iipay Nation of Santa Ysabel be distributed to the Yavapai Apache Nation, pursuant to an order from Sacramento County Superior Court," a March 30 memo from the California Gambling Control Commission stated.

The La Posta Band case is Yavapai-Apache Nation v. La Posta Band of Diegueno Mission Indians.

California Court of Appeal Decision:
Yavapai-Apache Nation v. La Posta Band of Diegueno Mission Indians (June 28, 2017)