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Great Western Development Corp. v. Benison

United States District Court, N.D. Alabama, Western Division

October 29, 2018

JONATHAN BENISON, et al., Defendants.


          L. Scott Coogler, United States District Judge


         Plaintiffs Great Western Development Corporation, Inc. (“Great Western”), and Ventec LLC (“Ventec”) bring this action against Jonathan Benison (“Sheriff Benison”), individually and in his official capacity as Sheriff of Greene County, Alabama; William Nick Underwood (“Underwood”), individually and in his official capacity as a Greene County Commissioner; Young People's Alliance Association for Youth Development Council Inc. (designated in the complaint as Young People's Alliance Organization and hereinafter referred to as “YPAO”); and River's Edge Bingo, LLC (“River's Edge”) (collectively “Defendants”), alleging violations of the Equal Protection Clause of the United States Constitution, conspiracy to deprive Plaintiffs of the equal protection of the laws, violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), conspiracy to violate RICO, tortious interference with contractual and business relations, civil conspiracy, and fraud. Before this Court are:

• Underwood's Motion for Summary Judgment (Doc. 84);
• Great Western's Motion for Summary Judgment on Sheriff Benison's Counterclaim. (Doc. 88);
• Great Western's Motion for Summary Judgment on Underwood's Counterclaim. (Doc. 89);
• Sheriff Benison's Motion for Summary Judgment (Doc. 90);
• YPAO's Motion for Summary Judgment (Doc. 91);
• YPAO's Motion for Leave to File Amended Answer (Doc. 116);
• Underwood's Motions to Withdraw Purported Factual Admissions (Docs. 121 & 128); and
• Great Western's Motion for an Evidentiary Hearing (Doc. 129).

         The motions have been briefed and are ripe for review. For the reasons stated below, Great Western's Motions for Summary Judgment on Underwood and Sheriff Benison's Counterclaims (docs. 88 & 89) are due to be granted, while Underwood, Sheriff Benison, and YPAO's Motions for Summary Judgment (docs. 85, 90, & 91) are due to be granted in part and denied in part. Additionally, YPAO's Motion for Leave to File Amended Answer (doc. 116) is due to be denied. Moreover, the Court finds that Underwood's Motions to Withdraw Purported Factual Admissions (docs. 121 & 128) and Great Western's Motion for an Evidentiary Hearing (doc. 129) are due to be terminated as moot.

         II. BACKGROUND[1]

         A. Statement of Facts

         In 2003, voters approved a constitutional amendment allowing nonprofit organizations to operate bingo games in Greene County, Alabama. Ala. Const. Amend. 743. The amendment charges the sheriff of the county with the duty of promulgating and enforcing rules and regulations for the operation of bingo games in Greene County. (Id. at § 3.) In 2011, Sheriff Benison entered office and enacted new rules and regulations for the operation of bingo by non-profit organizations within Greene County. Under these rules, an organization seeking a charity bingo license must file an application with the sheriff and pay a licensing fee for each license year in order to receive a license. Any license denial or non-renewal may be appealed to the Greene County Commission to make a final determination on the matter.

         Pursuant to these rules and regulations, James Carter (“Carter”), the Chairman of the Board of Directors of Great Western, applied for a bingo license in March 2011 on Great Western's behalf. Subsequently, in July 2011, Don Baylor (“Baylor”), Ed Frazier (“Frazier”), and Steven Wallace (“Wallace”) formed Ventec, and Ventec entered into a Basic Operating Agreement with Great Western.

         There is some dispute regarding the content of discussions between Plaintiffs and Sheriff Benison preceding the issuance of the license to Great Western. However, it is undisputed that Great Western received a charity bingo license in October 2011 for a one-year period. After Great Western received its license, Baylor met with Underwood, who served as a Greene County Commissioner from 2011 to 2014, to discuss his plans for Great Western's charity bingo operation. Underwood is one of the founders of YPAO. YPAO is a Greene County charity that at times has operated bingo games in Greene County. Throughout the time in question, Underwood served as both general counsel for and an officer of the organization. During his meetings with Underwood, Baylor, according to his deposition testimony, shared confidential information about Great Western's bingo project without knowledge that Underwood was involved with YPAO. Underwood, in his role as a Greene County Commissioner, was involved not only with the appeal of bingo license denials but also with setting the sheriff's budget in Greene County.[2]

         After the issuance of the license, Great Western made plans to start a bingo operation on the Hay Field property using the Plantation House as a “temporary facility.” Although Plaintiffs attempted to secure adequate funding to build a larger bingo facility, they were unsuccessful. As a result, Plaintiffs began to renovate the Plantation House with the goal of opening in April 2012.

         In March of 2012, Sheriff Benison had his attorney, Flint Liddon (“Liddon”) send a letter to Plaintiffs stating that he would not approve of a bingo operation at the Plantation House. Liddon then sent additional correspondence to Plaintiffs indicating that Sheriff Benison took issue both with the location of the site and the use of a temporary facility. In these letters, Liddon, at the direction of Sheriff Benison, specifically informed Plaintiffs that “…the piece of property close to the Knoxville exit on Highway 59 is not considered by the Sheriff to be an appropriate place to house bingo operations, and [Sheriff Benison] will not allow any such operations at that location.” (Doc. 86 Ex. V.)

         Great Western asserts that it responded to this correspondence by “reminding the sheriff [that] in their initial discussions it was agreed that the Plantation House would serve as a temporary site” for operations. (Doc. 86 Ex. W.) Plaintiffs continued to work on the Plantation House, while they also sought investors to further support their renovations. However, at least one attempt by Plaintiffs to recruit investors was disrupted by Sheriff Benison's Deputies, who arrived at the Plantation House and interrupted the pitch based on a call they allegedly received about an ongoing break in at the site. Additionally, negotiations with Ken Hobbs (“Hobbs”), who was another potential investor, did not come into fruition. Instead, Hobbs later formed a partnership with YPAO and Underwood.

         In September of 2012, Sheriff Benison again informed Plaintiffs that they would not be allowed to operate their bingo facility at the Plantation House. However, Sheriff Benison allowed Plaintiffs to move to the Blue Block construction site elsewhere on the Hay Field property. On October 11, 2012, Great Western applied for a renewal of its charity bingo license, which was set to expire on October 22, 2012.

         During the pendency of Plaintiffs' license renewal, YPAO and Underwood entered into an agreement with Hobbs to expand YPAO's bingo operation. At the time YPAO was operating out of the Comfort Inn, though it had been looking to expand or renovate that location. It was shortly after this agreement was entered into that Plaintiffs' application for a license renewal was denied. Plaintiffs appealed Sheriff Benison's decision to the Greene County Commission on January 8, 2013. Evidence in the record suggests that Underwood, who was at the time the Chairman of the Greene County Commission and a member of a charity bingo partnership with Hobbs and YPAO, presided over the appeal.

         While its appeal was pending, Great Western continued construction on the Blue Block site. Jim Woods, a member of Ventec, claims that it was at this time that Sheriff Benison approached him at the site and asked him what he was building. Woods stated that he was building a “Wal-Mart.” However, Woods testified that Sheriff Benison knew a bingo hall and not a Wal-Mart was being built. Sheriff Benison in response, according to Woods, stated that a license for a Wal-Mart would be $50, 000. (Doc. 87 Ex. 42.) Woods refused to pay Sheriff Benison the requested funds. The next day some of Sheriff Benison's deputies came by the site and attempted to shut down construction. Plaintiffs ceased construction on the Hay Field property shortly after this incident.

         Although Plaintiffs' appeal was still pending, YPAO ceased bingo operations at the Comfort Inn and made plans to move elsewhere. It is disputed as to when YPAO entered discussions with Sheriff Benison about moving to the land vacated by Great Western, where River's Edge would ultimately be located. However, the evidence indicates that Plaintiffs withdrew their appeal in March 2013 and that construction for YPAO's River's Edge bingo facility began shortly after that in April 2013. Although Plaintiffs attempted to reinstate their appeal in May 2013, only one Commissioner moved to reinstate the appeal, and thus the appeal was dismissed.

         Sheriff Benison officially transferred YPAO's bingo license to the River's Edge location in August 2013 when the facility was nearly complete. River's Edge was officially opened to the public in December of 2013. River's Edge operated until March 2014 when it was closed because it was raided by state law enforcement officials. River's Edge reopened in August 2014 after receiving a loan of $375, 000 from Underwood. However, River's Edge closed again in May 2015, when the operators of the bingo hall took all the equipment. At this point, Underwood again loaned money to River's Edge to enable it to reopen and was then hired as the general manager of River's Edge.

         During the operation of River's Edge, payments were made by YPAO to Jake Enterprise Group (“Jake Enterprise”), amounting to almost $450, 000. (Doc. 87 Ex. 47, Ex. 48.) Jake Enterprise is a Wyoming corporation created by Underwood. Plaintiffs have contended that Underwood, Sheriff Benison, Liddon, and Hobbs all hold an interest in and received payment from Jake Enterprise during YPAO's association with River's Edge.[3] Moreover, Underwood's legal assistant and River's Edge CFO, Takilia Mayfield, testified in her deposition that she was instructed, during YPAO and Underwood's partnership with River's Edge, to backdate Underwood's billings to YPAO in order to make his billed hours match certain amounts of money. Mayfield claims that Underwood, during this time, would bill YPAO for 60 hours or more of work, even though he was providing legal services to other clients. Mayfield also indicated that, during this time, payments were made to a number of fictitious entities by YPAO, for services that were not rendered. River's Edge and YPAO's partnership ceased in 2016.

         B. Procedural History

         Great Western initially filed suit in state court in October 2014. That action was removed to federal court and dismissed on March 9, 2015, when Great Western's former counsel failed to respond to a motion to dismiss. (Doc. 101 Ex. 63.) Great Western's former counsel then advised his clients to file a second lawsuit pro se on behalf of the corporation. That suit was filed on May 18, 2015, and dismissed on August 13, 2015. (Doc. 101 Ex. 66 at ¶ 12.) The action currently before this Court was filed on November 25, 2015. (Doc. 1.)


         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact[4] and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is genuine if “the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Id. A genuine dispute as to a material fact exists “if the nonmoving party has produced evidence such that a reasonable factfinder could return a verdict in its favor.” Greenberg v. BellSouth Telecomms., Inc., 498 F.3d 1258, 1263 (11th Cir. 2007) (quoting Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001)). The trial judge should not weigh the evidence, but determine whether there are any genuine issues of fact that should be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In considering a motion for summary judgment, trial courts must give deference to the nonmoving party by “view[ing] the materials presented and all factual inferences in the light most favorable to the nonmoving party.” Animal Legal Def. Fund v. U.S. Dep't of Agric., 789 F.3d 1206, 1213-14 (11th Cir. 2015) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). However, “unsubstantiated assertions alone are not enough to withstand a motion for summary judgment.” Rollins v. TechSouth, Inc., 833 F.2d 1525, 1529 (11th Cir. 1987). Conclusory allegations and “mere scintilla of evidence in support of the nonmoving party will not suffice to overcome a motion for summary judgment.” Melton v. Abston, 841 F.3d 1207, 1220 (11th Cir. 2016) (per curiam) (quoting Young v. City of Palm Bay, Fla., 358 F.3d 859, 860 (11th Cir. 2004)). In making a motion for summary judgment, “the moving party has the burden of either negating an essential element of the nonmoving party's case or showing that there is no evidence to prove a fact necessary to the nonmoving party's case.” McGee v. Sentinel Offender Servs., LLC, 719 F.3d 1236, 1242 (11th Cir. 2013). Although the trial courts must use caution when granting motions for summary judgment, “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole.” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).


         A. COUNT I & II- RICO

         1. Sheriff Benison in his Official Capacity

          Sheriff Benison asserts that he cannot be sued in his official capacity for RICO violations and cites to Lancaster Community Hospital v. Antelope ValleyHospital District, 940 F.2d 397, 440 (9th Cir. 1991). The Court agrees as bringing a RICO claim against Sheriff Benison in his official capacity would essentially constitute a suit against the state of Alabama. See Kentucky v. Graham, 473 U.S. 159, 167- 68 (1985). However, to the extent that Plaintiffs are seeking recovery from Sheriff Benison in his individual capacity, this ...

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