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Cy Ryan

Court Dismisses Suit Over New Mexico Casino

29 April 2005

CARSON CITY, Nevada -- The Nevada Supreme Court on Thursday refused to order pretrial arbitration in a suit in Las Vegas between two companies over operation of a casino for an Indian tribe in New Mexico.

The court rejected the appeal of Nevada Gold & Casinos Inc., which sought arbitration in its contract disagreement with American Heritage Inc., led by Fred Gillmann.

The two companies formed a limited liability company in Nevada with Nevada Gold agreeing to provide financing for the casino at the Pueblo of Laguna Tribe in New Mexico with Gillmann to run the operation.

The two sides then disagreed on the terms of the contract. In October 2002 Nevada Gold filed suit in Texas to collect on a promissory note guaranteed by Gillmann. Two days later Gillmann filed suit in Nevada seeking to rescind the agreement that formed the limited liability company.

The Nevada Gold suit moved forward in Texas. Gillmann says that after some adverse pretrial rulings in Texas, Nevada Gold sought to require arbitration in the Nevada suit.

District Judge Allan Earl denied the Nevada Gold motion.

The Supreme Court upheld Earl saying Nevada Gold already litigated substantial issues on the merits of the case. It said compelling arbitration now would require the parties to duplicate their efforts.