Kent v. Mindlin
| Decision Date | 15 January 1997 |
| Docket Number | No. 96-15338,96-15468,96-15338 |
| Citation | 106 F.3d 407 |
| Parties | NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. Michael KENT; John Kent, Plaintiffs-Appellees, v. Ivan MINDLIN, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before: WIGGINS, BRUNETTI, T.G. NELSON, Circuit Judges.
John and Michael Kent sued Dr. Ivan Mindlin in district court for the breach of two agreements related to sports betting pools. Mindlin denied the existence of the agreements and also argued they were illegal in any event. After a bench trial, the district court rendered judgment for the Kents, and Mindlin appealed. This court has jurisdiction under 28 U.S.C. § 1291. We AFFIRM the judgment.
In this lawsuit, the Kents initially claimed Mindlin owed money for betting pools in 1984-85 and for two other sports betting agreements in 1987. Mindlin defended both claims by denying the existence of the 1987 agreements and by arguing that all the agreements were unenforceable because they involved gambling that was illegal under state law.
The district court granted summary judgment in favor of Mindlin, finding all the alleged agreements were unenforceable because the subject matter involved illegal betting (at unlicensed bookmakers in various states). On appeal, we affirmed with regard to the claims arising from 1984-85. Kent v. Mindlin, 52 F.3d 333 (TABLE), 1995 WL 236248 (9th Cir.1995). We remanded to the district court, however, for further proceedings to determine the legality and enforceability of the two alleged 1987 contracts.
After a bench trial, the district court rendered judgment in favor of the Kents. It ruled that the parties had entered into two legal betting arrangements involving the 1987 college football season. First, Mindlin agreed to pay $700,000 to the Kents in exchange for an exclusive right to bet the sport lines based on the computer analysis the Kents generated (the "Information Agreement"). After one week, Mindlin terminated the agreement, to which the Kents agreed without giving up their right to payment for their analysis of the games they had provided for the one week. That week (one of sixteen for the season), only 22 games had been posted for bets. Because 430 games were expected to be posted for the season, the Kents claimed 22/430 of the $700,000. The court thus awarded $35,648.
Soon after the Information Agreement ended, Mindlin, the Kents, and others agreed to another betting arrangement (the "Betting Agreement"). The Betting Agreement formed a betting pool based on the Kents generating the betting analysis and Mindlin placing bets at the Union Plaza casino (a legal sports book) in Las Vegas on the Sundays before the games. Mindlin's primary contribution to the pool was his access to a non-public early line through his relationship with the managers.
The Kents testified that they believed Mindlin placed the bets personally at the Union Plaza, rather than phoning them in from out-of-state. The Kents also testified that they intended that this pool's bets would only be placed in legal sports books. Occasionally, other participants in the plan would place bets later in the week at other licensed sports books if the betting lines changed favorably.
Each week, John Kent would calculate how much Mindlin owed the rest of the pool from the Union Plaza bets and subtract Mindlin's share of the profits from the other bets. Until it ceased operations around October 31, 1987, the pool had a positive running balance from the Union Plaza operations of $166,900. The Kents were entitled to 80% of the profits from what Mindlin owed to the rest of the pool. Mindlin paid the other participants their share, but did not pay the Kents. Thus, the district court found that Mindlin owed the Kents $133,520 under the Betting Agreement.
Thus, the total judgment for the Kents was $169,168, plus prejudgment interest. The order stated interest on the Information Agreement should accrue from September 5, 1987, and on the Betting Agreement from October 31, 1987.
We review the district court's findings of fact for clear error. Fed.R.Civ.P. 52(a); Masayesva v. Zah, 65 F.3d 1445, 1453 (9th Cir.1995), cert. denied sub. nom., 116 S.Ct. 1569 (1996). Questions of law, including a district court's interpretation of state law, are reviewed de novo. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221 (1991). Applications of law to facts present mixed questions, reviewed de novo where the application requires "consideration of legal principles." Masayesva, 65 F.3d at 1453. We review for clear error, however, if the application is "essentially factual." Id.
Mindlin alleges several specific errors, both to the sufficiency of the district court's findings and to its substantive decision. He contends that the Information Agreement and the Betting Agreement were illegal, and that the district court did not make sufficient findings of their legality in any event. Mindlin also challenges several of the district court's factual determinations, claiming that the district court (1) had no factual basis to find the parties agreed to the terms of the Information Agreement, (2) erred in not finding the Betting Agreement illegal because Mindlin placed illegal telephone wagers from out-of-state to make the agreement work, and (3) improperly awarded prejudgment interest.
The Kents argue that Mindlin's objections to the alleged illegality of the agreements under Nevada Revised Statutes § 463.361 and § 463.160(1)(b) are waived because Mindlin did not raise them to the district court. We agree that Mindlin failed to raise the argument that an "information service" license was required for the Information Agreement to be legal under § 463.160(b). 1 While the parties extensively argued and briefed the legality of the contracts in general, the district court had no notice that it should specifically address the "information service" license defense under § 463.160(1)(b). Accordingly, we decline to consider this new argument on appeal.
Mindlin did sufficiently raise the "gaming debt" argument. His Proposed Findings of Fact and Rules of Law included a specific reference to § 463.361. Thus, we consider this argument on appeal. For the reasons explained below, however, we reject it.
Mindlin contends that the Betting Agreement is an unenforceable "gaming debt." Under N.R.S. § 463.361, a "gaming debt" is not enforceable without a "credit instrument," that is, a writing that evidences a gaming debt owed to one who holds a gaming license. N.R.S. § 463.01467. Mindlin argues that "gaming debt" is undefined by Nevada statute, but that sports betting is clearly a "game" under N.R.S. § 463.0152. Thus, any obligation under the Betting Agreement would be unenforceable because the Betting Agreement is an oral agreement.
Mindlin's argument is incorrect. The Betting Agreement did not create a "gaming debt" under N.R.S. § 463.361 because it did not involve the parties wagering against each other. Although "gaming debt" may be undefined by statute, the Nevada Supreme Court distinguished betting pools, including oral ones, from "gaming debts." Sigel v. McEvoy, 707 P.2d 1145, 1146 (Nev.1985) (). The Nevada Supreme Court recognized that § 463.361 somewhat modified the common law rule on the enforceability of gaming debts, id., but the statute did not change (or even mention) the meaning of the term "gaming debt." See generally Moser v. State, 544 P.2d 424, 426 (Nev.1975) (). Sigel recognized the essence of a "gaming debt" is that "one player was to lose to the other." Sigel, 707 P.2d at 1146. Thus, "gaming debts" differ from agreements to divide profits between the parties resulting from wagers with third parties (such as sports books).
Moreover, as we stated on the previous appeal, "Nevada courts do enforce betting pool agreements to lay wagers at licensed casinos and share profits." Kent v. Mindlin, 52 F.3d 333 (TABLE), 1995 WL 236248 at * 2 (9th Cir.1995) (citing Sigel). We also said that evidence that the Kents collected and analyzed data, that Mindlin would place the wagers, that all wagers would be at licensed casinos, and so forth, could support a finding the 1987 agreements were lawful under Sigel. Id. at * 4.
Mindlin contends that the district court failed to specify adequately why the 1987 agreements were legal under Nevada law in its Findings of Fact and Conclusions of Law ("findings"). Federal Rule of Civil Procedure 52(a) states
In all actions tried upon the facts without a jury ..., the court shall find facts specially and state separately its conclusions of law thereon....
The findings, stated either in the court's opinion or separately, must be sufficient to indicate the factual basis of the ultimate conclusion. Kelley v. Everglades Drainage Dist., 319 U.S. 415, 422, 63 S.Ct. 1141, 1145 (1943); Vance v. American Hawaii Cruises, Inc., 789 F.2d 790, 792 (9th Cir.1986). Neither detailed evidentiary findings nor findings asserting the negative of every issue is required, however. Carr v. Yokohama Specie Bank, Ltd., 200 F.2d 251, 255 (9th Cir.1952).
The district court made sufficient findings regarding the legality of the agreements. The district court provided six pages of findings. The court cited Sigel for its conclusion the agreements were...
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