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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA
NOMADIC ENTERTAINMENT GROUP, LLC, Case No. _______ Plaintiff, v.
COMPLAINT
DAKOTA FEBRUARY EVENTS, LLC,
DEMAND FOR JURY TRIAL
Defendant.
Plaintiff Nomadic Entertainment Group, LLC (“Nomadic”) by and through its undersigned counsel, hereby files its Complaint and Demand for Jury Trial against defendant Dakota February Events, LLC (“Dakota”) and alleges on information and belief as follows: NATURE OF THE ACTION 1.
This action arises from Dakota’s unlawful termination of its Facility and
Event License Agreement (“Agreement”) with Nomadic. (See Affidavit of Lee A. Hutton, III (“Hutton Aff.”) Ex. A.) Pursuant to the Agreement, Nomadic constructed a 65,000-square foot temporary structure (the “Facility”) at Nomadic’s own expense on Dakota’s Mystic Lake Casino property. The Facility was intended to be used to host a four-night event, featuring major live music performances, beginning on February 1, 2018 and running up to and including the night of Super Bowl LII on February 4, 2018, that was marketed to the public as “Club Nomadic at Mystic Lake.”
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2.
Nomadic constructed the Facility at its own expense after Dakota recruited
Nomadic to come to Dakota’s Mystic Lake Casino property to construct the Facility. Under the Agreement, the only way Nomadic could recoup its more than $2,400,000 in construction costs and realize the profit it expected from the project was through ticket sales and other revenue from the Club Nomadic event. Nomadic reasonably relied on the good faith cooperation of Dakota during construction of the Facility, which began in September 2017, to ensure that the Club Nomadic event would occur. 3.
The construction of the Facility was substantially complete as of January 1,
2018, as shown in photographs taken on or about January 11-13, 2018. (See Hutton Aff. Ex. B.) However, without prior notice to Nomadic, and contrary to Dakota’s representations and the parties’ agreements during construction, Dakota terminated the Agreement on January 10, 2018 on the basis that Dakota’s building inspector (an individual who worked at the direction of, and whose salary was paid by, Dakota) had not issued a Certificate of Occupancy for the Facility by January 1, 2018. 4.
However, Dakota’s delays had made it impossible to obtain a Certificate of
Occupancy by January 1, 2018. Since the signing of the Agreement and commencement of construction of the Facility, Dakota repeatedly delayed, and intentionally interfered with, the timely approval of phase plans and engineering drawings, including schematics concerning the electrical connection between Mystic Lake and the Facility, that required approval before a Certificate of Occupancy could be issued. For example, after Nomadic submitted certain drawings to Dakota for approval, Dakota failed to respond to Nomadic’s submissions for over forty (40) days, despite Nomadic’s repeated attempts to 2
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follow up. Dakota’s building inspector, who worked at the direction of and was paid by Dakota, caused additional delay by failing to conduct prompt review of Nomadic’s submissions, and by taking vacations during critical periods of the project. 5.
Dakota repeatedly represented to Nomadic during construction that
Nomadic’s progress was satisfactory and that Dakota expected Nomadic to continue construction of the Facility despite the fact that, under the construction timeline expressly agreed to by Nomadic and Dakota, a Certificate of Occupancy would not be able to issue until after January 15, 2018. Under the construction timeline agreed to by Nomadic and Dakota, January 15, 2018 was established as the target construction-to-production handover date (which is also referred to as the “total completion date”). A Certificate of Occupancy could not have been issued before the total completion date. That is because, under the parties’ construction plan, changes needed to be made to the Facility after the total completion date by subcontractors (such as interior designers) that were required to be reviewed by Dakota’s building inspector before the Certificate could issue. 6.
Moreover, Nomadic and Dakota had agreed in November 2017 that the
portable toilets for the Facility would not be delivered and installed until at least January 8, 2018. After additional discussions, the parties subsequently agreed that the installation date for the toilets would occur in mid-January, approximately 7-10 days before the first night of the event. The installation of the toilets was necessary before a Certificate of Occupancy could be issued. The parties’ agreement that the toilets would be installed in mid-January is another representation by Dakota that the parties had agreed and
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understood that a Certificate of Occupancy would not be issued on January 1, 2018, but that Nomadic’s progress was satisfactory and Dakota wanted Nomadic to continue. 7.
Indeed, the Facility was, in all material respects, fully operational by
January 1, 2018, and would have met the conditions for a Certificate of Occupancy well in advance of the first event date during Super Bowl week (i.e., February 1, 2018). 8.
However, on January 10, 2018, Dakota terminated the Agreement on the
basis that a Certificate of Occupancy had not been issued by January 1, 2018. This contradicted the express directions Nomadic received from Dakota’s own project manager, Noah Eastman (“Eastman”), who Dakota required Nomadic to interface with on the project and who continued to direct Nomadic to complete the Facility from January 1, 2018 through Dakota’s January 10, 2018 termination of the Agreement. 9.
Dakota’s termination of the Agreement on January 10 also flatly
contradicted the statements that Dakota’s Vice President of Marketing, Alison Fogarty, made to the Star Tribune and the public just two days earlier, on January 8, that the Club Nomadic event was scheduled, that guests will “want to keep the party going,” and that “It feels just like going to a nightclub in Vegas, only much larger.” (Hutton Aff. Ex. C.) 10.
Shortly after Dakota’s termination of the Agreement on January 10, 2018,
and without input from Nomadic, Dakota issued press releases on January 12, 2018 announcing Dakota’s unilateral cancellation of the Club Nomadic event and promoting an alternative event hosted solely by Dakota on the same dates. The alternative event will be hosted inside the Mystic Lake Casino that Dakota operates on the property adjacent to where Nomadic had constructed the Facility and will feature four of the five performers 4
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scheduled to perform in the Facility at the Club Nomadic event. In separate correspondence, Dakota then demanded that Nomadic immediately tear down the Facility and delivered a threat that Nomadic employees entering the property were trespassers. 11.
Dakota unlawfully used the lack of issuance, by its own paid building
inspector, of a Certificate of Occupancy by January 1, 2018 to avoid the obligations under the Agreement that Dakota would have had to incur between Dakota’s termination of the Agreement and the first day of the event. Dakota’s remaining obligations under the Agreement, that it is avoiding by unlawfully terminating the Agreement, include approximately $4,400,000 in un-incurred production costs. As of January 10, 2018, Dakota had not disbursed payment for production costs in satisfaction of its obligations under the Agreement. Instead, Dakota unilaterally choose to cancel the Club Nomadic event and host a nearly identical event inside Dakota’s Mystic Lake Casino on the same nights including the same performers as the scheduled Club Nomadic event. 12.
As a direct result of Dakota’s cancellation of the Club Nomadic event,
on January 17, 2018, Atlantic Specialty Insurance Company (“ASIC”), the issuer of the surety bond (the “Performance Bond”) that Nomadic obtained pursuant to the First Amendment to the Agreement dated October 4, 2017 (the “First Amendment”, see Hutton Aff. Ex. D), sent Nomadic a letter demanding that Nomadic post $5,000,000.00 of collateral to ASIC by January 25, 2018. (See Hutton Aff. Ex. E.) 13.
In addition, Dakota’s unlawful termination of the Agreement and
subsequent press releases unilaterally canceling the Club Nomadic event have caused Nomadic to suffer several million dollars in damages—both in the form of Nomadic’s 5
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costs of construction that Nomadic cannot otherwise recoup, as Nomadic reasonably expected, from the shared revenue from the event, and Nomadic’s lost profits. In addition, Dakota is now forcing Nomadic to disassemble and remove the Facility and return Dakota’s property to its prior state at Nomadic’s sole cost and expense without having the opportunity to recover those costs from the Club Nomadic revenues. 14.
Nomadic seeks a declaration that (i) Dakota’s termination of the Agreement
breached the Agreement, (ii) Nomadic’s conduct under the Agreement did not constitute a Completion Breach (as such term is defined in the First Amendment), (iii) Nomadic’s conduct did not cause Completion Damages (as such term is defined in the First Amendment) and (iv) Dakota has no claim on Nomadic’s Performance Bond. Nomadic also seeks damages against Dakota (including Nomadic’s construction costs and lost profits) caused by Dakota’s breaches of the Agreement, as well as damages caused by Nomadic’s breach of the implied covenant of good faith and fair dealing, and negligent and fraudulent misrepresentations. Since Dakota’s unlawful actions also mean that it will reap the benefits of Nomadic’s work while unjustly enriching itself at Nomadic’s expense, Nomadic also seeks disgorgement of Dakota’s profits gained from hosting the alternative event at its casino in lieu of the event at Club Nomadic. THE PARTIES 15.
Plaintiff Nomadic Entertainment Group, LLC, is a Delaware limited
liability company, wholly-owned by On Location Events, LLC, with its principal place of business at 180 Varick Street, Suite 1230, New York, NY 10014.
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16.
Defendant Dakota February Events, LLC is a limited liability company
that is owned by the Shakopee Mdewakanton Sioux Community (the “Community”), a sovereign, federally-recognized Indian Tribe. 17.
Pursuant to the First Amendment, Dakota “expressly and unequivocally
waive[d] the application of sovereign immunity as set forth in Section 17(l) above solely in connection with the sole, exclusive and limited issues involving any alleged Completion Breach and/or Completion Damages as regards [to] any claim made by [Dakota] on [Nomadic’s Performance Bond].” (Hutton Aff. Ex. D.) 18.
In Dakota’s January 10, 2018 letter to Nomadic terminating the Agreement,
Dakota expressed its “right to pursue a claim upon the performance bond posted by [Nomadic] through Atlantic Specialty Insurance Company.” (Hutton Aff. Ex. F.) 19.
Dakota’s unlawful actions have caused ASIC to demand that Nomadic post
$5,000,000 of collateral on Nomadic’s Performance Bond. 20.
Dakota is not immune from suit in this Court with respect to the claims
brought by Nomadic in this action because the claims arise out of and relate to a case of actual controversy between Nomadic and Dakota with respect to Dakota’s claim on the Performance Bond and the damages Dakota’s unlawful actions caused Nomadic in connection with ASIC’s requirement to post collateral on the Performance Bond. 21.
In addition, Dakota is not immune from the claims brought in this action,
which are entirely commercial in nature. The Community approached Nomadic to construct the Facility on the Community’s property and formed Dakota specifically for
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the solely commercial purpose of contracting with Nomadic to host the Club Nomadic at Mystic Lake event, a for-profit event that has a commercial purpose. JURISDICTION AND VENUE 22.
This Court has subject matter jurisdiction under 28 U.S.C. § 1332 because
there is complete diversity between the parties and the amount in controversy is greater than $75,000. 23.
This Court has personal jurisdiction over Dakota on the ground that Dakota
transacted business in the State of Minnesota and the causes of action brought herein arise from such transactions. In addition, this Court has personal jurisdiction over Dakota pursuant to the First Amendment, pursuant to which Dakota and Nomadic agreed that: any dispute arising between [Dakota], Nomadic and Surety regarding a claim made by [Dakota] on the Bond on the sole and exclusive and limited issues regarding an alleged Completion Breach (as defined below) and/or Completion Damages (as defined below) shall be governed by and construed in accordance with the laws of the State of Minnesota, and venue for such dispute shall be exclusively maintained in federal district court residing in Minneapolis, Minnesota or St. Paul, Minnesota. (Hutton Aff. Ex. D.) 24.
This Court has jurisdiction over this dispute because it arises out of and
relates to a case of actual controversy between Nomadic and Dakota with respect to Dakota’s express claim on the Performance Bond and the damages Dakota’s unlawful actions (including its cancellation of the event) caused Nomadic in connection with ASIC’s requirement to post collateral on the Performance Bond.
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25.
Venue for this action properly lies in this Court pursuant to the First
Amendment, and pursuant to 28 U.S.C. § 1391 because a substantial part of the events or omissions giving rise to the claims brought in this action occurred in this judicial district. FACTUAL ALLEGATIONS A.
The Facility and Event License Agreement
26.
Pursuant to the Agreement, Nomadic was required to construct, at its own
expense, the Club Nomadic Facility, a 65,000 square-foot, multi-level temporary structure with a (standing and seated) capacity of 9,000 persons intended to accommodate world-class entertainment and hospitality. The Agreement and the parties contemplated at all times that Nomadic would recoup its construction and other out-of-pocket costs and earn a profit from its portion of the revenues from the Club Nomadic event, including ticket sales, sponsorships and the sale of other items including food and beverages. 27.
Aside from the Club Nomadic event, the Agreement provided no means or
consideration for Nomadic to recoup its construction and out-of-pocket costs. 28.
Section 2(b) of the Agreement required Dakota to “reasonably cooperate”
with Nomadic “to secure the provision of utility and other services to the Facility.” (Hutton Aff. Ex. A.) As section 2(b), and the Agreement as a whole, make clear, Nomadic’s ability to construct the Facility, which was to be done on Dakota’s property, necessarily contemplated a cooperative, good faith relationship of trust, forthrightness and continuous accurate disclosures between Dakota and Nomadic. 29.
Section 16(a) of the Agreement requires that a Certificate of Occupancy be
issued by January 1, 2018 for the installation of the Facility to be deemed “Complete,” 9
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and Section 16(b)(i) provides that Dakota may terminate the Agreement if Nomadic fails to timely “Complete” the installation of the Facility. (Hutton Aff. Ex. A.) 30.
As will be explained in sections B through D below, Dakota (i) engaged in
conduct, including its building officials’ delays in reviewing Nomadic’s submissions, which made it impossible for a Certificate of Occupancy to issue by January 1, 2018, and (ii) made repeated and consistent representations to Nomadic during construction that led Nomadic to reasonably believe that Dakota had agreed that Nomadic’s progress was satisfactory, and that Nomadic was to continue construction of the Facility even though a Certificate of Occupancy could not issue until after January 15, 2018. 31.
Section 2(h) of the Agreement required Nomadic to obtain a Performance
Bond for Dakota’s benefit in the amount of $5,000,000. (Hutton Aff. Ex. A.) On October 5, 2017, Nomadic obtained a surety bond (the “Performance Bond”) from ASIC with Dakota as an obligee. The Performance Bond provides that if Nomadic “shall have failed, and be declared by [Dakota] to have failed, to faithfully and timely” complete its obligations under Section 16(a)(iv) of the Agreement, that ASIC “shall” pay Dakota “the Completion Damages under the Agreement.” (Hutton Aff. Ex. G.) 32.
The First Amendment, which was executed by Nomadic and Dakota in
connection with Nomadic’s obtaining the Performance Bond, defines “Completion Damages” as “the amounts payable by [Nomadic] under” sections 16(b)(i) and 16(b)(ii) of the Agreement, which include costs of removal of the Facility. (See Hutton Aff. Exs. A, D.) Pursuant to Nomadic’s Indemnity Agreement with ASIC (the “GIA”), Nomadic
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was required to indemnify ASIC from any claims by Dakota on the Performance Bond, and to post collateral to ASIC when demanded by ASIC. (Hutton Aff. Ex. H.) B.
Dakota’s Conduct Delayed Issuance of a Certificate of Occupancy
33.
Nomadic’s construction of the Facility was delayed due to unanticipated
requests by Dakota to alter building plans, and to make additions that would exclusively benefit Dakota. For example, Dakota requested a heated tunnel be constructed between an entrance to Club Nomadic and Dakota’s adjacent casino at Mystic Lake that was not a part of the initial project design and plans approved by both parties. 34.
Nomadic agreed to Dakota’s requests in reliance on Dakota’s clear and
repeated representations to Nomadic that Dakota was aware that its requests would cause delay, and that, as discussed in section C below, Nomadic and Dakota agreed to a targeted total completion date for the facility of January 15, 2018. 35.
Dakota caused additional delays when it imposed a requirement on
Nomadic, which was not in the Agreement, that Dakota submit all of its documentation (including engineering drawings) through Eastman, a project manager hired by Dakota to oversee the project. Nomadic reasonably relied on the statements and actions of Eastman, who was the primary point of contact for Nomadic and the person to whom Dakota insisted Nomadic submit all of its work and requests for approval. 36.
Furthermore, and critically, Dakota’s head of building, Eric Schlueter
(“Schlueter”), failed to respond to Nomadic’s submission of certain engineering drawings – drawings that Nomadic first submitted to Dakota in early October – for a period of over forty (40) days despite Nomadic’s repeated attempts to confirm approval. Indeed, at a 11
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January 9, 2018 meeting, when Dakota employees asked Lamprides why certain electrical approvals were not obtained, Eastman admitted that Nomadic had submitted the relevant drawings weeks earlier but that Schlueter had not responded to Nomadic. 37.
The day after the same January 9, 2018 meeting, Eastman notified Nomadic
that the electrical drawings Lamprides submitted weeks before were approved. C.
The Parties Agreed to a Total Completion Date of January 15, 2018
38.
Prior to the deadline, Dakota knew, and the parties had agreed, that it was
impossible for a Certificate of Occupancy to issue by January 1, 2018. Under the construction timeline agreed to by Nomadic and Dakota, the parties agreed that January 15, 2018 was the target construction-to-production handover date (also referred to as the “total completion date”). It is impossible for a Certificate of Occupancy to issue before the total completion date because changes were required be made to the Facility after the total completion date by subcontractors (such as interior designers). These design changes needed to be reviewed before the Certificate of Occupancy could issue. Because the subcontractors could not start their work on the Facility until after the total completion date, Dakota knew that a Certificate of Occupancy could not issue until after the total completion date. The changes to the Facility made by subcontractors had the potential to affect safety such as ingress and egress, and were required to be reviewed by Dakota’s building inspector before a Certificate of Occupancy could issue. 39.
In addition, in November 2017, Nomadic and Dakota agreed that the
portable toilets for the Facility would not be delivered and installed at the Facility until at least January 8, 2018. After additional discussions, the parties agreed that the toilet 12
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installation date would occur in mid-January, approximately 7-10 days before the first night of the event. The installation of the toilets was necessary for a Certificate of Occupancy to issue. The parties’ agreement regarding the toilets was another agreement between by the parties, and representation by Dakota to Nomadic, that, although a Certificate of Occupancy would not be issued by January 1, 2018, Nomadic’s progress was satisfactory to Dakota and Nomadic should continue constructing the Facility. 40.
Despite the fact that Dakota knew that a Certificate of Occupancy
could not be issued by January 1, 2018 (due to, among other things, Schlueter’s delays in reviewing Nomadic’s drawings, the parties’ agreement to a January 15 total completion date, and agreement to defer installation of the portable toilets until mid-January), Dakota repeatedly instructed Nomadic to continue construction of the Facility. Nomadic reasonably relied on Dakota’s demands and representations, representations which were also made to ASIC, the issuer of the required Performance Bond. 41.
Indeed, certain information and documentation that Dakota was required to
provide to Nomadic related to the electrical connection from the Mystic Lake Casino electrical platform to the Facility (a temporary structure), which were essential for the Certificate of Occupancy to issue, were not provided by Dakota to Nomadic until several days after January 1, 2018. Dakota knew for weeks prior to January 1, 2018 that this critical information was long overdue and had not been provided, and that a Certificate of Occupancy could not be issued until this information was provided to Nomadic.
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D.
Dakota Induced Nomadic to Continue Construction of the Facility at Nomadic’s Expense After January 1, 2018
42.
Dakota’s contractors and employees persisted in inducing Nomadic’s
continued construction of the Facility—at Nomadic’s own expense—after January 1, 2018. For example, from January 2 through Dakota’s termination of the Agreement on January 10, Dakota’s project manager, Eastman, whom Nomadic was required to interface with on the project, directed Nomadic to continue construction. Indeed, Eastman admitted at a January 9, 2018 meeting that Nomadic had submitted the electrical drawings several weeks earlier but that Schlueter had not responded to Nomadic. After this January 9, 2018 meeting, on the next day, January 10 (hours before Dakota terminated the Agreement), Eastman notified Lamprides that the electrical engineering drawings that Nomadic submitted to Dakota several weeks earlier were approved. 43.
In addition, from January 2 through January 9, Nomadic’s and Dakota’s
business personnel had discussions regarding potential changes in the program and the allocation of revenues. But at no point during those discussions did Dakota tell Nomadic that Dakota intended to terminate the Agreement on the basis that Dakota’s building inspector had not issued a Certificate of Occupancy by January 1, 2018. Therefore, Nomadic continued construction of the Facility until January 10, 2018. 44.
However, with no advance warning, and contrary to its own project
manager’s email earlier that day, on January 10, 2018 Dakota sent a letter to Nomadic terminating the Agreement and alleging that the lack of a Certificate of Occupancy as of January 1, 2018 constituted an “Event of Default” under the Agreement. Dakota’s letter 14
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also stated that Dakota “is reserving all of its rights upon termination of the Agreement, including the right to pursue a claim upon the performance bond posted by [Nomadic] through Atlantic Specialty Insurance Company.” (Hutton Aff. Ex. F.) 45.
Dakota’s termination of the event on January 10 also flatly contradicted
the statements that Dakota’s Vice President of Marketing, Alison Fogarty, made to the Star Tribune and the public just two days earlier, on January 8, that the Club Nomadic event was scheduled, that guests will “want to keep the party going. and that “It feels just like going to a nightclub in Vegas, only much larger.” (Hutton Aff. Ex. C.) 46.
Dakota’s termination of the Agreement is contrary to its express
representations to Nomadic and was done so that Dakota could avoid its obligations under the Agreement and exclusively profit from a replacement event inside its Casino. Dakota’s actions mean that Nomadic will be unable to participate in the replacement event and so cannot recover any of its construction costs from the event’s revenues, to say nothing of profiting from an event Nomadic helped promote and advertise. Indeed, the web page on Mystic Lake’s website “www.mysticlake.com/clubnomadic” is still an active web page accessible to the public that promotes the alternative event Dakota is hosting inside its Casino (without mentioning Nomadic). (Hutton Aff. Ex. I.) 47.
On January 11, 2018, Nomadic sent a letter to Dakota stating that its
termination of the Agreement was unlawful and that Nomadic had fully complied with its obligations under the Agreement, and informing Dakota that its actions had substantially interfered with Nomadic’s ability to perform its obligations under the Agreement. (Hutton Aff. Ex. J.) 15
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48.
The next day, January 12, 2018, Nomadic received a letter from Dakota
again stating that it had terminated the Agreement and requesting Nomadic to immediately remove the Facility (at Nomadic’s sole expense), adding further that if Nomadic did not remove the Facility, Dakota would remove it and charge Nomadic for the cost of removal. (Hutton Aff. Ex. K.) 49.
Also on January 12, 2018, Dakota issued a press release that the “Club
Nomadic at Mystic Lake” event was cancelled. This press release falsely accused Nomadic (i) of failing to obtain a certificate of occupancy and (ii) and building a structure that was below Dakota’s “standards.” In addition to being false, the press release also caused substantial, additional damages to Nomadic (including reputational damage) that would not have occurred had Dakota attempted to mitigate the damages. Indeed, the Facility was complete, and the issuance of a Certificate of Occupancy was imminent according to Dakota’s own contractor, Eastman, at the time. 50.
On, January 17, 2018, Nomadic received a letter from ASIC demanding
that Nomadic post $5,000,000.00 in collateral on the Performance Bond under the GIA. (Hutton Aff. Ex. E.) The letter stated that the ASIC expected payment “by January 25, 2018” and threatened suit if Nomadic did not comply with ASIC’s demand. 51.
ASIC’s demand that Nomadic post collateral was caused by Dakota’s
unlawful termination of the Agreement and cancellation of the event.
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CLAIMS CLAIM I: DECLARATORY JUDGMENT 52.
Nomadic repeats and re-alleges Paragraphs 1-51 as if fully set forth herein.
53.
The Agreement is a valid and enforceable contract between Nomadic and
Dakota. Nomadic has fully performed under the Agreement, including when taking into account the modifications to the Agreement that the parties made during performance regarding the expected time of issuance of a Certificate of Occupancy. Alternatively, as a direct result of the actions of Dakota, its employees and its contractors, including Schlueter, Nomadic’s performance under the Agreement became an impossibility. 54.
Dakota has claimed, including in letters dated January 10 and 12, 2018, that
Nomadic defaulted on its obligations under the Agreement due to Dakota’s building inspector’s failure to issue a Certificate of Occupancy by January 1, 2018, and has claimed that Nomadic’s default gives rise to a claim by Dakota against Nomadic upon Nomadic’s Performance Bond. In addition, on January 17, 2018, ASIC, sent Nomadic a letter demanding that Nomadic post $5,000,000.00 of collateral to ASIC. ASIC’s demand was caused by Dakota’s unlawful termination of the Agreement and Dakota’s subsequent press releases stating that the Club Nomadic event was cancelled and an alternative event would be held on the same dates inside Dakota’s casino. 55.
Nomadic denies Dakota’s allegations on the basis that among other reasons,
the delay in the issuance of the Certificate of Occupancy was due to Dakota’s and its employees’ and contractors’, intentional actions, neglect and/or delay, and that Dakota
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made repeated and consistent representations to Nomadic during the parties’ course of performance of the Agreement that Dakota agreed and understood that the January 1, 2018 deadline for issuance of a Certificate of Occupancy could not be met, and that the parties had agreed upon target total completion date of January 15, 2018. 56.
Nomadic also denies that its conduct constituted a Completion Breach
(as defined in the First Amendment), denies that its conduct caused any Completion Damages (as defined in the First Amendment), and further denies that Dakota has any claim on the Performance Bond for Completion Damages or any other losses. 57.
A justiciable controversy therefore exists between the parties.
58.
By reason of the foregoing, Nomadic requests that this Court adjudge,
declare and decree that (i) Dakota’s termination of the Agreement breached the Agreement, (ii) Nomadic’s conduct under the Agreement did not constitute a Completion Breach (as defined in the First Amendment), (iii) Nomadic’s conduct did not cause Completion Damages (as defined in the First Amendment), and (iv) Dakota has no claim, for Completion Damages or otherwise, on Nomadic’s Performance Bond. CLAIM II: BREACH OF CONTRACT 59.
Nomadic repeats and re-alleges Paragraphs 1-58 as if fully set forth herein.
60.
The Agreement is a valid and enforceable contract between Nomadic and
Dakota. Nomadic has fully performed under the Agreement, including when taking into account the modifications to the Agreement that the parties made during performance regarding the expected time of issuance of a Certificate of Occupancy. Alternatively, as a 18
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direct result of the actions of Dakota, its employees and its contractors, including Schlueter, Nomadic’s performance under the Agreement became an impossibility. 61.
Dakota’s termination of the Agreement, refusal to perform its remaining
obligations therein, and cancellation of the “Club Nomadic” event constitutes a material breach of the Agreement, and has caused Nomadic to suffer damages, including lost recoupment of Nomadic’s construction costs, and lost profits that Nomadic would have received had Dakota performed its obligations, in an amount to be determined. CLAIM III: BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 62.
Nomadic repeats and re-alleges Paragraphs 1-61 as if fully set forth herein.
63.
The Agreement is a valid and enforceable contract between Nomadic and
Dakota. Nomadic has fully performed under the Agreement, including when taking into account the modifications to the Agreement that the parties made during performance regarding the expected time of issuance of a Certificate of Occupancy. Alternatively, as a direct result of the actions of Dakota, its employees and its contractors, including Schlueter, Nomadic’s performance under the Agreement became an impossibility. 64.
A duty of good faith and fair dealing is implied into the Agreement.
65.
Dakota breached the implied covenant of good faith and fair dealing by,
among other things, intentionally delaying Nomadic’s construction of the Facility, and making false or misleading representations to Nomadic during the parties’ course of performance that Dakota agreed and understood that the January 1, 2018 deadline would not be met and that the parties had agreed upon a target total completion date of January 19
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15, 2018. Dakota made these representations with the intent to induce Nomadic’s reliance on those representations, and exacerbated the harm to Nomadic by publicly cancelling the “Club Nomadic” event (despite the fact that the Facility’s construction was substantially complete) without Nomadic’s consent or even an attempt to mitigate. 66.
Dakota’s breach of the implied covenant of good faith and fair dealing
caused Nomadic to suffer damages in an amount to be determined. CLAIM IV: NEGLIGENT MISREPRESENTATION 67.
Nomadic repeats and re-alleges Paragraphs 1-66 as if fully set forth herein.
68.
During the parties’ course of performance of the Agreement, Dakota, and
its employees and contractors, negligently represented to Nomadic that Dakota agreed and understood that the January 1, 2018 deadline for issuance would not be met, and that the parties agreed upon a target total completion date of January 15, 2018. 69.
In reliance on Dakota’s representations, Nomadic continued to construct the
Facility at Nomadic’s own expense in the manner requested by Dakota and its employees and contractors. Absent Dakota’s misrepresentations, Nomadic would not have continued to construct the Facility. Nomadic has therefore been damaged as a result of Dakota’s negligent misrepresentations, in an amount to be determined. CLAIM V: FRAUDULENT MISREPRESENTATION 70.
Nomadic repeats and re-alleges Paragraphs 1-69 as if fully set forth herein.
71.
During the parties’ course of performance of the Agreement, Dakota
knowingly represented (including through its employees and contractors) to Nomadic that 20
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Dakota agreed and understood that the January 1, 2018 deadline would not be met, and that the parties agreed upon a target total completion date of January 15, 2018. 72.
In reliance on Dakota’s false representations, Nomadic continued to
construct the Facility at Nomadic’s own expense in the manner requested by Dakota and its employees and contractors. Absent Dakota’s representations, Nomadic would not have continued to construct the Facility. Nomadic has therefore been damaged as a result of Dakota’s knowingly false misrepresentations, in an amount to be determined. PRAYER FOR RELIEF WHEREFORE, Nomadic demands judgment as follows: 1. Enter judgment in favor of Nomadic on all counts; 2. Declare that (i) Dakota’s termination of the Agreement breached the Agreement, (ii) Nomadic’s conduct under the Agreement did not constitute a Completion Breach (as defined in the First Amendment to the Agreement), (iii) Nomadic’s conduct did not cause Completion Damages (as defined in the First Amendment to the Agreement), and (iv) Dakota has no claim, for Completion Damages or otherwise, on Nomadic’s Performance Bond; 3. Order that Dakota pay over to Nomadic all gains, profits, and advantages derived from the conduct alleged herein; 4. Order that Dakota pay to Nomadic the damages that Nomadic has sustained by reason of the conduct alleged herein; 5. Order that Dakota pay Nomadic pre-judgment interest on Nomadic’s damages; 6. Order that Dakota pay Nomadic’s attorneys’ fees and costs of this action to Nomadic; 7. Order that Dakota be permanently enjoined from making any statements concerning Nomadic’s performance under the Agreement and/or attributing in any form responsibility to Nomadic for cancelling the Club Nomadic event at Mystic Lake; and 21
CASE 0:18-cv-00176 Document 1 Filed 01/23/18 Page 22 of 22
8. Grant such other and further relief as the Court deems is just and proper.
Dated: Minneapolis, Minnesota January 23, 2018
Respectfully Submitted, BOIES SCHILLER FLEXNER LLP Jonathan D. Schiller* Joshua I. Schiller* Thomas H. Sosnowski* 575 Lexington Ave New York, NY Tel: (212) 446-2300 Fax: (212) 446-2350
[email protected] [email protected] [email protected]
/s/ Lee A. Hutton, III Lee A. Hutton, III MN ID # 0327992 BARNES & THORNBURG LLP 225 South Sixth Street, Suite 2800 Minneapolis, MN 55402 Tel: (612) 367-8711 Fax (612) 333-6798
[email protected]
Attorneys for Plaintiff Nomadic Entertainment Group, LLC *pro hac vice application pending
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