SPOKANE, Wash. - A $20 million lawsuit has been initiated against the Kalispel tribe by Spirit Mountain Management and Consulting Inc. for failing to uphold contractual obligations.
The suit, filed in the federal Circuit Court in Multnomah County, Ore., July 27 was the result of an April decision by the Kalispel tribe to sever its business relations with Spirit Mountain, a wholly owned subsidiary of the Confederated Grand Ronde tribe of Oregon.
In the lawsuit, Spirit Mountain lists three related complaints stemming from the Kalispel decision to back away from the deal -- breach of contract; breach of implied contract and the "unjust enrichment" on the part of the Kalispel.
Grand Ronde spokesman Justin Martin said his group spent hundreds of thousands of dollars backing a nearly $6 million loan the Kalispels used to open the Northern Quest casino.
Additionally Martin said there was a separate contract to retain the Spirit Mountain group as consultants. Martin said his group upheld its end of the deal and was "surprised" by the Kalispels' April announcement.
"It's just all very upsetting and frankly the whole thing doesn't make sense. Our tribal council was very hurt by the decision," Martin said.
Spirit Mountain sources said financial hardship has not been a problem for the Kalispels. Perhaps most surprising to the Spirit Mountain group is the fact the Northern Quest casino has proven to be a financial success.
Unconfirmed estimates from Spirit Mountain state that Northern Quest has grossed more than $6 million since opening last December, a full two months ahead of schedule.
Martin claims the Kalispel's success in opening early and pulling in a quick profit were direct results of the financial and consulting work by Spirit Mountain.
This was the first major deal for the Spirit Mountain group. The Grand Ronde tribe formed the consulting group after it successfully opened the Spirit Mountain Casino in 1995 and was looking for economic diversification. Sources say the tribe decided to form a business to help other tribes.
Kalispel sources are upset at Spirit Mountain for making this a public issue. They claim that it was a business decision that was fair all the way around.
"It's regretful that the Grande Ronde is making this a public issue. I feel it's detrimental to Indian gaming in general," said tribal spokesman Curt Holmes.
The Kalispels, however, were short on specifics. In a press release they said they were "disappointed" by "individuals" representing the Grand Ronde tribe. They maintain they tried to deal with their business concerns responsibly.
Though the press release is a bit vague, the Kalispels allude to the fact there were "severe changes in key personnel," though they did not spell out how this affected the business relationship.
They do state quite clearly that representatives for Grand Ronde have been non-responsive to their efforts to resolve the dispute.
Martin counters that the four employees in question are still working at Spirit Mountain, and would not speculate how this affects the business relationship and specifically the breach of contract.
On the question of non-responsiveness, Martin said he cannot directly address this issue. He did say the tribe felt it had no other choice.
Kalispel refused further comment and said the press release would be all for the moment.
Since the complaint was only recently filed, no court date has been set. In the press release, the Kalispel tribe said it will fight the charges.
" ... their decision to file a lawsuit leaves us no alternative but to protect tribal assets to the best of our ability."