Las Vegas Sands Llc v. Nehme

• Decision Date: 11 January 2011
• Docket Number: No. 09–16740.,09–16740.
• Citation: 632 F.3d 526
• Parties: LAS VEGAS SANDS, LLC, a Nevada limited liability company, DBA Venetian Resort Hotel Casino, Plaintiff–Appellee,v.Amine T. NEHME, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

632 F.3d 526

84 Fed. R. Evid. Serv. 574

11 Cal. Daily Op. Serv. 412

2011 Daily Journal D.A.R. 532

LAS VEGAS SANDS, LLC, a Nevada limited liability company, DBA Venetian Resort Hotel Casino, Plaintiff–Appellee,

v.Amine T. NEHME, Defendant–Appellant.

No. 09–16740.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 17, 2010.Filed Jan. 11, 2011.

Gary Logan, Esq., Las Vegas, NV, for defendant-appellant.Von S. Heinz, Lewis and Roca LLP, Las Vegas, NV, for plaintiff-appellee.Appeal from the United States District Court for the District of Nevada, Brian E. Sandoval, District Judge, Presiding. D.C. No. 2:07–cv–01012–BES–RJJ.Before: A. WALLACE TASHIMA and CARLOS T. BEA, Circuit Judges, and LINDA R. READE, Chief District Judge.^*

OPINION

BEA, Circuit Judge:

This diversity action arises out of a gambling debt Amine T. Nehme (“Nehme”) is claimed to owe Las Vegas Sands, LLC (the “Venetian”), on an unpaid casino “marker” in the amount of $499,000, plus interest.

A marker is a gambling credit instrument that allows a gambler to receive all or part of the credit line the casino has approved for him, based on the gambler's prior credit application with the casino. Once the gambler and a casino representative sign the marker, the gambler may exchange the marker for gambling tokens, or chips. If the gambler does not pay the marker when he has finished gambling, the marker is outstanding and the casino may later submit the marker, like a check, to the gambler's bank for payment.

On cross-motions for summary judgment, the district court excluded from evidence two key documents proffered by defendant Nehme on the ground they were not properly authenticated by an affidavit made on personal knowledge: (1) a letter from one of Nehme's attorneys that predated Nehme's unpaid marker by seven months and that requested, on Nehme's behalf, that the Venetian cancel and not renew, under any circumstances, Nehme's credit line; and (2) a U.S. Postal Service return receipt, dated three days after the letter, that recites someone at the Venetian may have received Nehme's attorney's letter before Nehme signed the marker. The district court then granted summary judgment to the Venetian on claims that Nehme had failed to pay a negotiable instrument (the marker), and had breached a contract (a prior credit application agreement and the marker). The district court denied Nehme's motion for reconsideration, and Nehme timely appealed.

We conclude that the district court abused its discretion in excluding the above pieces of evidence under an incorrect legal standard and that this error was not harmless. Thus, we reverse and remand with instructions that the district court consider such evidence under the correct legal standard.

Factual and Procedural Background

Nehme, a California resident, is a repeat gambler at the Venetian, a Nevada limited liability company. The Venetian operates a licensed Las Vegas casino. It followed the standard industry procedures when it extended credit to Nehme. Those procedures are set out by the Nevada Supreme Court in Nguyen v. State, 116 Nev. 1171, 14 P.3d 515, 516–17 (2000):

A gambler applies for casino credit by completing a standard credit application form. Once the casino approves the application and grants a line of credit to the gambler, the gambler may receive all or part of the credit line at a gambling table in the form of a “marker.” The marker is an instrument, usually dated, bearing the name of the gambler, the name and account number of the gambler's bank, and the instruction “Pay to the Order of” the casino for a specific value in U.S. dollars. Once the gambler and a casino representative sign the marker, the gambler may then exchange the marker for gambling tokens, or chips. If the gambler does not pay the marker when he has finished gambling, the marker is outstanding and the casino may submit the marker to the gambler's bank for payment as if it were a check on the gambler's account at the bank.

In this case, Nehme applied for a line of credit with the Venetian on March 13, 2004 by completing a standard credit application form. In the Venetian credit application, Nehme set out his name, address, social security number, and employment information. The bottom of the credit application provided, in pertinent part: “Before drawing on my line of credit, if granted, I agree to sign credit instruments in the amount of the draw.... Each draw against my credit line constitutes a separate loan of money.... I will sign a credit instrument in the amount of the loan.” By signing the credit application, Nehme “agree[d] to repay all loans and draws against [his] credit line in accordance with the terms agreed to in [his] credit file.” Most important for this appeal, the credit application provided: “The Venetian Resort–Hotel–Casino endorses responsible gaming. We will cancel or reduce your credit line upon your request.”

Under Nehme's credit application, the Venetian approved a $200,000 initial credit line for Nehme in March 2004, and extended that credit line to $350,000 in May 2004 and then to $500,000 in July 2004. Nehme gambled at the Venetian several times in 2004 and 2005. On February 8, 2005, a Mr. Bennett, purporting to be Nehme's attorney, sent a return receipt letter to the Venetian “requesting that all credit lines established by [Nehme] or on his behalf immediately be terminated and that no further credit be extended to him under any circumstances.” Mr. Bennett received a U.S. Postal Service return receipt that purports to show someone at the Venetian may have signed for the letter on February 11, 2005, over the address shown for the Venetian. By August 2005, Nehme had repaid all gambling debts he owed to the Venetian.

Nehme returned to the Venetian over Labor Day weekend in September 2005. Nothing in the record demonstrates Mr. Bennett's letter was questioned, rejected or answered by the Venetian, or withdrawn by Nehme directly or through a representative. Neither is there any proof that Nehme executed a new credit application.

On Labor Day, September 5, 2005, Nehme signed a casino marker for $500,000 payable to the Venetian.¹ Nehme exchanged the marker for chips and lost all $500,000 worth of chips playing Blackjack. Nehme then left the Venetian with the marker outstanding. On January 5, 2006, the Venetian presented for payment the $500,000 marker to Bank of America, the bank specified on the marker, but the marker was returned for insufficient funds. The Venetian applied a $1,000 safekeeping deposit to the unpaid marker, such that it now claims Nehme owes it $499,000 in gambling debt, plus interest.

In July 2007, the Venetian sued Nehme in Nevada state court for (1) failure to pay a negotiable instrument (i.e., Nehme's casino marker); (2) breach of contract (i.e., the Venetian credit application agreement and the marker); and (3) unjust enrichment. That same month, Nehme removed this case to federal court in the District of Nevada based on diversity of citizenship jurisdiction. In April 2008, the Venetian filed a motion for summary judgment. Later that month Nehme filed an opposition, to which he attached an unsigned copy of the Bennett February, 2005, letter. Then, in September 2008, Nehme filed a cross-motion for summary judgment, to which he attached, in pertinent part, a signed copy of another Bennett letter, a postal service return receipt for the unsigned Bennett letter, and excerpts from the deposition testimony of Venetian employees.²

The district court, sua sponte and without a hearing, excluded the Bennett letters, the return receipt for the unsigned Bennett letter, and the deposition excerpts on the ground they were not properly authenticated. ³ The district court granted summary judgment to Nehme on the Venetian's unjust enrichment claim on the ground this claim is unavailable where a written contract (i.e., the credit application agreement) exists. ⁴ The district court then granted summary judgment to the Venetian on the claims of failure to pay a negotiable instrument and breach of contract, on the ground that no triable issue of fact remained as to the elements of those two claims and that there was no evidence to raise a triable issue of fact as to any of Nehme's affirmative defenses to liability. The district court also refused to consider Nehme's defense of contract rescission, in part because Nehme had not pleaded that defense in his answer.

Nehme filed a motion for reconsideration, to which he attached an affidavit from his attorney, Bennett, that authenticated the unsigned Bennett letter and its postal service return receipt, as well as properly authenticated deposition excerpts regarding the Venetian's credit line cancellation policy. The district court denied the motion, and Nehme timely appealed.

Jurisdiction and Standard of Review

We have jurisdiction under 28 U.S.C. § 1291. We review de novo the district court's grant of summary judgment to “determine, viewing the evidence in the light most favorable to the nonmoving party and drawing all justifiable inferences in its favor, whether there are any genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir.2002). Where the parties file cross-motions for summary judgment, the court must consider each party's evidence, regardless under which motion the evidence is offered. Fair Hous. Council v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001).

Analysis

The district court granted summary judgment to the Venetian after it had excluded an unsigned copy of the Bennett letter attached as an exhibit to Nehme's opposition to the Venetian's motion for summary judgment, as well as a signed copy of the Bennett letter, a postal service return receipt for the unsigned Bennett letter, and deposition excerpts attached as exhibits to Nehme's cross-motion for summary judgment. Because the district court...