Full House Resorts, Inc. et al v. Boggs & Poole Contracting Group, Inc. et al

Filing 179

ORDER denying Defendant Boggs' 156 Motion for Sanctions; and denying as moot Defendant Boggs' 167 Motion to Strike. Signed by District Judge Keith Starrett on December 23, 2015 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
FULL HOUSE RESORTS, INC. and
SILVER SLIPPER CASINO VENTURE, LLC
v.

PLAINTIFFS

CIVIL ACTION NO. 1:14-CV-223-KS-MTP

BOGGS & POOLE CONTRACTING GROUP, INC.
and RONALD LUSTIG

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant Boggs & Poole Contracting Group, Inc.’s
(“Boggs”) Motion for Sanctions [156] and Motion to Strike Affidavit of John M. Lassiter, Esq., in
Plaintiffs’ Response in Opposition (“Motion to Strike”) [167]. After considering the submissions
of the parties, the record, and the applicable law, the Court finds that Boggs’ Motion for Sanction
[156] should be denied and that its Motion to Strike [167] should be denied as moot.
I. BACKGROUND
This action centers on certain alleged defects in the construction of the parking garage at the
Silver Slipper Casino in Bay St. Louis, Mississippi. Full House Resorts, Inc. (“Full House”) and
Silver Slipper Casino Venture, LLC (“Silver Slipper”) own and operate the Silver Slipper Casino
(the “Casino”). In November of 2004, Silver Slipper contracted with Defendant Ronald Lustig for
Lustig’s provision of certain architectural services pertaining to the design and construction of the
Casino and the attendant parking garage (the “Garage”). (See Lustig Contract [14-1].) In May of
2006, Silver Slipper contracted with Boggs for the construction of the Casino and Garage. (See
Boggs Contract [7-1].) The construction of the Garage was complete and possession turned over
to Silver Slipper as of February 7, 2007. (See Response in Opposition [142] at p. 20.) Concrete
pours, though, were not finished until April 2007, when pours were complete and certifications and

pay applications were submitted by Boggs. (See id..) Full House became an owner of the
Casino/Garage in September of 2012, when it purchased 100% of the equity interests or securities
of Silver Slipper.
Disputes between Silver Slipper and Boggs arose during the construction process regarding
payments, expenses associated with delays, and the quality of the work performed to build the
Garage. The parties submitted to these disputes to arbitration in late January 2008, where the
arbitration panel found for Boggs.
In October 2013, Plaintiffs retained Reigstad and Associates, Inc. (“Reigstad”), an
engineering firm, after noticing deficiencies in the Garage, such as water leakage and panel
movement. Reigstad inspected the premises and prepared a corrective plan to alleviate the
movement and deterioration. During the implementation of the plan, Reigstad noticed that lateral
reinforced steel (“rebar”) was missing in the pour-strip locations at each level of the Garage. The
“reinforced steel was necessary for the Garage to have proper structural support and meet applicable
building codes.” (Complaint [1-2] at ¶ 13.)
Counsel for Full House and Silver Slipper (collectively referred to as “Plaintiffs”) sent a
letter to Boggs’ counsel on February 14, 2014, in order to give Boggs notice of Plaintiffs’ claims.
(Plaintiffs’ Letter [156-1]). Boggs’ counsel responded on February 24, 2014, explaining, even if
they were not barred by res judicata, the claims were time-barred as the applicable statute of
limitation and statute of repose had passed. Despite these defenses, on April 9, 2014, Plaintiffs
initiated this action against Boggs and Lustig in the Circuit Court of Hancock County, Mississippi.
(See Complaint [1-2].) Plaintiffs’ counsel provided a courtesy copy of the Complaint [1-2] to
Boggs’ counsel on May 2, 2014.

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The Complaint asserted various claims against Boggs and Lustig in connection with the
missing rebar, claiming that the statute of limitations and statute of repose had been tolled because
of Boggs and Lustig’s fraudulent concealment of the claims. The act of concealment alleged in the
Complaint [1-2] was the pouring of the concrete over the rebar.
On May 13, 2014, Boggs’ counsel served Plaintiffs’ counsel with a letter detailing why
Boggs was not liable, specifically explaining that the claims were barred both by the applicable
statutes of limitation and repose and by res judicata. Boggs’ counsel gave Plaintiffs’ counsel ten
days to withdraw the lawsuit. It did not, however, address Plaintiffs’ allegation of fraudulent
concealment.
On May 23, 2014, Boggs removed the proceeding to this Court on the basis of diversity
jurisdiction under 28 U.S.C. § 1332. (See Notice of Removal [1].) Shortly thereafter, Boggs filed
its first Motion for Summary Judgment [7], urging dismissal based on the doctrines of res judicata
and collateral estoppel, and arguing that the Plaintiffs’ claims are time-barred. Lustig joined in
Boggs’ summary judgment motion. (See Joinder [14].) In their first motion, Boggs and Lustig
pointed to the lack of evidence of concealment as their basis for the argument that the claims were
time-barred. The Court, though, granted Plaintiffs relief under Federal Rule of Civil Procedure
56(d), allowing them time to complete discovery on the concealment claim. (See Order [60] at pp.
29-30.) Once discovery was complete and no evidence of fraudulent concealment was adduced, the
Court granted Boggs’ Second Motion for Summary Judgment [128] and Lustig’s Motion for
Summary Judgment [130]. The Court found that Plaintiffs could not produce any evidence to
support their allegation of fraudulent concealment. (See Order [151] at p. 6.)
II. DISCUSSION
The Fifth Circuit has held that
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Rule 11 places three duties on counsel: (1) counsel must make a reasonable inquiry
into the factual basis of any pleading, motion, or other paper; (2) counsel must make
a reasonable inquiry into the law; and (3) counsel must not sign a pleading, motion
or other paper intended to delay proceedings, harass another party, or increase the
costs of litigation.
St Amant v. Bernard, 859 F.2d 379, 382 (5th Cir. 1988) (citing Thomas v. Capital Sec. Servs. Inc.,
836 F.2d 866, 874 (5th Cir. 1988) (en banc)). Boggs contends that Plaintiffs’ counsel was derelict
in his duty to undertake a reasonable inquiry into the law before filing the current action. The Court
disagrees.
If a reasonable inquiry into Mississippi law were conducted, Plaintiffs’ counsel would have
no doubt discovered that, for tolling of a statute of limitation or repose, the Fifth Circuit has held that
Mississippi law unambiguously requires the affirmative act of fraudulent concealment to occur after
the concealed claim has accrued. See Ross v. Citifinancial, Inc., 344 F.3d 458, 464 (5th Cir. 2003)
(“. . . Mississippi law is unambiguous. Pursuant to § 15-1-67, Plaintiffs were required to prove an
affirmative act of fraudulent concealment post-completion of the insurance sales in order to toll the
statute of limitations.”) Plaintiffs’ attorney conducted such a reasonable inquiry. It appears from
the pleadings and the first motion for summary judgment, though, that Plaintiffs’ attorney argued
in good faith that the pouring of the concrete was an act of fraudulent concealment that occurred
after the rebar was left out. However, once the Court ruled that this was not an act of fraudulent
concealment because it was a necessary component of the construction process, (Order [60] at p.
26), Plaintiffs’ attorney proceeded to discovery even though his first theory of fraudulent
concealment was eliminated by the Court. However, the Court itself noted in its opinion that Boggs’
or Lustig’s “payment applications, lien waivers, and shop drawing showing the existence of the steel
may very well create a fact issue regarding Plaintiffs’ allegations of concealment” and subsequently

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allowed discovery to be conducted under Rule 56(d). (Order [60] at p. 30.) Plaintiffs’ attorney
therefore had the Court’s approval to proceed to discovery.
Nothing in the record suggests that Plaintiffs’ attorney filed any pleading, motion, or other
paper with the Court that he knew or should have known was frivolous. In fact, it does not appear
that any frivolous motion or pleading was ever filed in this action. Therefore, the Court will deny
Boggs’ Motion for Sanctions [156].
The Court will also deny as moot Boggs’ Motion to Strike [167], as it considered only the
record before it in deciding its Motion for Sanctions [156], and did not consider the affidavit of John
M. Lassiter, Esq.
III. CONCLUSION
IT IS THEREFORE ORDERED AND ADJUDGED that Boggs’ Motion for Sanctions
[156] is denied.
IT IS FURTHER ORDERED AND ADJUDGED that Boggs’ Motion to Strike [167] is
denied as moot.
SO ORDERED AND ADJUDGED this the 23rd day of December, 2015.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

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