Card room license suit settled
February 26, 2010 9:59 AM
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BY JENNA CHANDLER
THE PORTERVILLE RECORDER
The Tule River Tribe has reached a $425,000 settlement of a civil lawsuit with some Porterville entrepreneurs over a controversial card room license deal.
A sales agreement was struck in 2007 that would have transferred the card room license of The Mint to the tribe for $800,000. The Tribe’s lawsuit alleged that the money it paid for the card was never returned after the state made a decision to not allow the transfer.
As a result of the settlement, the Tribe now holds a Deed of Trust on the property occupied by the Brickhouse Bar and Grill in downtown Porterville — and Brickhouse partners, including James Podergois and David Gonzales, do not have to pay back the $800,000 they received from the Tribe in January 2007. According to Podergois, the terms of the settlement agreement allow five years for $425,000 to be paid to the Tribe, which he said would likely require sale of the property.
“I think it was a very fair settlement,” Podergois said. He went on to say that “I think I can sell the building for substantially more than [$425,000] if the economy gets better. It will keep operating unless the economy gets a lot worse. We’re making ends meet, but its struggling.”
The Tribe filed the lawsuit in October 2008; defendants named were James Podergois, individually and owner of The Mint Card Room and doing business as LBC Construction; the Brickhouse Bar and Grill, Inc. and four officers of that corporation — Podergois, David Gonzales, Sherry Arleene Gonzales, and Stephanie Ellen Winn.
The $800,000 was intended to purchase the card room license of The Mint card room — which Podergois previously operated adjacent to The Palm Tree Inn (former Paul Bunyan) motel. The California Gambling Control Commission (CGCC), however, did not approve The Mint’s license to be transferred to the Tribe.
Had the transfer been allowed, the Tribe would have been the first Indian tribe to operate a card room under California law.
The Tribe’s main cash source, the Eagle Mountain Casino, is allowed to have card tables with gambling because it is on tribal land not covered by state gambling laws. But off-reservation card rooms in California are regulated by the state commission.
As the Brickhouse struggles to operate in a down economy, Podergois has reopened the card room, The Mint, at 1365 Olive Avenue. It is Porterville’s only card room operated under California gambling control regulations.
The state has placed a moratorium on issuing new card room licenses that is scheduled to last until Jan. 2015.
Most of the money received from the Tribe was invested in the Brickhouse Bar and Grill. The former Schortman’s Bicycle Shop and an adjacent property were remodeled extensively to create the popular downtown eatery and sports bar.
At the time the card room license sale was made public in November 2007, then Tribal Administrator Rodney Martin said the time frame of the sales contract with Podergois was “challenging,” but that he believed the Tribe would be able to complete the requirements or be granted an extension provided for in the sales agreement.
In copies of correspondence included as evidence in the civil suit, Podergois said the $800,000 should not have to not be returned because the Tribe had failed to secure the proper state approval for the card room within one year — a term of the sales agreement.
Documents filed in conjunction with the suit indicate that the Tribe attempted to negotiate an extension on its contract with David Gonzales proposing a new purchase price of $1.2 million in early December 2007, Podergois stating in correspondence it could be done for an additional $85,000 in February 2008, and an undated, unsigned document suggesting as much as a $3 million extension fee.
Eventually, the Tribe sued and the settlement reached in December places a Deed of Trust for the bar and restaurant property in the hands of the Tribe.
“I want to make one thing clear to the people of Porterville and to the Tule River Tribal Council: You have [falsely] insinuated that I have taken advantage of the tribe by selling it a card room license when I knew it couldn’t be done. In the initial meeting between me and Sam Cohen and Tom Stewart [Eagle Mountain Casino General Manager] when they first approached me and asked me if I wanted to sell my license, my first reply was to ask if this is something the Indians can do, and they told me it was their problem, to let them worry about it,” Podergois said.
On Oct. 8, 2008, the Tribe demanded its $800,000 back from Podergois, stating “the consent of the tribe was not real, mutual or free in that it was obtained solely through mistake of law and fact. The tribe is incapable of holding a card room license in California and Business and Professions code section 19858 makes it illegal to do so.”
Before that letter was ever mailed, both parties went back and forth, accusing each other of not negotiating in good faith.
Podergois faxed the California Gambling Control Commission on Feb. 25 the same year, notifying the state agency of his decision to withdraw from the sale of his card room license to the Tribe. He claimed that requests to extend the original time line of the sales agreement went unanswered.
“My client has been requesting an answer/counteroffer from the Tribe for the last two months Mr. Rodney Martin, Tribal Administrator assured my client that the Tribal Council would consider his request on Jan. 24, 2008 and again on Jan. 31, 2008, my client has still not received any form of communication,” a letter from Podergois’s attorney Greg Chambers dated Feb. 5, 2008, states. “My client is frustrated with the lack of communication and lack of progress in the transfer of the license and also on consideration of the amendment to the contract.”
Four days after faxing his recision to the state’s gambling commission, Podergois wrote to the tribe’s attorney:
“In response to your letter Feb. 27, 2008. If your intent is to scare me, you don’t. If it was to piss me off you succeeded. I am sorry that you and the Tribe feel poorly treated and discarded. The feelings are mutual ... If the tribe had acted in good faith over this period of time I would not have had to get these license renewals nor reopen the card room as the deal would have been completed by Dec. 31, 2007.”
Tribal Administrator Sam Cohen declined to comment for this story on behalf of the Tribe. Cohen worked for the tribe in another capacity prior to the card room deal and became Tribal Administrator late last year after former Tribal Administrator Rodney Martin left the Tribe’s employment.
Claudia Elliott contributed to this story.
-- Contact Jenna Chandler at 784-5000, Ext. 1050, or jchandler@portervillerecorder.com.

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