Wynn Las Vegas, LLC v. Tofani

Decision Date14 December 2017
Docket NumberNo. 69936,69936
PartiesWYNN LAS VEGAS, LLC, D/B/A WYNN LAS VEGAS, A NEVADA LIMITED LIABILITY COMPANY, Appellant/Cross-Respondent, v. CRISTIANO AUGUSTO TOFANI, AN INDIVIDUAL, Respondent/Cross-Appellant.
CourtCourt of Appeals of Nevada
ORDER AFFIRMING IN PART AND REVERSING IN PART

Wynn Las Vegas, LLC, appeals from a district court order denying its motion for partial summary judgment and a judgment upon a jury verdict. Cristiano Augusto Tofani cross-appeals from the same order and judgment and from an order awarding Wynn attorney fees, costs, and interest. Eighth Judicial District Court, Clark County; Jennifer P. Togliatti, Judge.

Tofani, an attorney from Italy, gambled at the Wynn Las Vegas Casino over a few days in September 2011.1 During that visit, he received credit in the amount of $800,000 in the form of Wynn casino markers. He gambled and lost the entire amount. After Tofani returned to Italy, Wynn began its collection efforts. Wynn's representatives and Tofani exchanged several emails in which Tofani said he wanted to repay his debt but could not because He did not have the money. He asked for more time but the debt was never paid.

A little over a year after Tofani's visit, Wynn filed a lawsuit against him alleging breach of contract, breach of the implied covenant ofgood faith and fair dealing, conversion, and unjust enrichment. Wynn amended its complaint to add fraud. Tofani asserted a gambling addiction defense. Wynn moved for summary judgment regarding several of its claims. The district court denied the motion and also ruled that Tofani could not assert the gambling addiction defense. At trial, Wynn requested a jury instruction on ratification which the district court refused; instead, the district court provided the jury with its own ratification instruction.

The jury rendered a verdict of $450,000 in favor of Wynn on its breach of contract and conversion claims. The district court ordered Tofani to pay Wynn's attorney fees, costs, and interest for a total of $455,607.95 in addition to the $450,000.

The district court properly denied Wynn's motion for partial summary judgment

Although Wynn argued below that it should be granted summary judgment on its claims for breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, and in the alternative, unjust enrichment, Wynn does not address all of its claims on appeal. Instead, Wynn asserts on appeal that it should have been granted summary judgment on its contract claims. Wynn argues that the evidence available during the litigation of the summary judgment motion showed that Tofani conclusively ratified his debt to Wynn.

This court may review an order denying summary judgment in an appeal from a final judgment. GES, Inc. v. Corbitt, 117 Nev. 265, 268, 21 P.3d 11, 13 (2001). The court's "review is de novo and without deference to the district court's findings." Id. "Summary judgment is appropriate only when there are no material issues of fact and the moving party is entitled to judgment as a matter of law." Id.

First, there were material issues of fact as to whether Tofani understood that a valid contract existed as intoxication was an issue. Second, Tofani's actions and intent as to whether he affirmed the full amount of debt claimed by Wynn, and whether he disaffirmed the debt "within a reasonable time," are not clear. See Seeley v. Goodwin, 39 Nev. 315, 323, 156 P. 934, 936 (1916); cf. Mason-McDuffie Real Estate, Inc. v. Villa Fiore Dev., LLC, 130 Nev. ___, ___, 335 P.3d 211, 213-14 (2014) (stating that it is a factual determination whether constructive eviction occurred, including whether a tenant vacated in "a reasonable time"). Thus, the district court did not err in denying summary judgment.

The district court abused its discretion by refusing Wynn's jury instruction on ratification

"The district court's decision to give or refuse a particular instruction will not be overturned absent an abuse of the district court's discretion or judicial error." Wyeth v. Rowatt, 126 Nev. 446, 464, 244 P.3d 765, 778 (2010). "A party is entitled to an instruction on every theory that is supported by the evidence, and it is error to refuse such an instruction when the law applies to the facts of the case." Id. (quoting Woosley v. State Farm Ins. Co., 117 Nev. 182, 188, 18 P.3d 317, 321 (2001)). "A district court is not bound by the suggested language of the standard instructions and is free to adapt them to fit the circumstances of the case." Id. "While the abuse of discretion standard is generally deferential, the reviewing court will not defer to a district court decision that is based on legal error." Frazier v. Drake, 131 Nev. ___, ___, 357 P.3d 365, 369 (Ct. App. 2015).

If the district court abused its discretion, this court considers whether the error was harmless. Wyeth, 126 Nev. at 465, 244 P.3d at 778. "An error is harmless when it does not affect a party's substantial rights."Id. "When an error is harmless, reversal is not warranted." Id. "But if the moving party shows that the error is prejudicial, reversal may be appropriate." Id. "To establish that an error is prejudicial, the movant must show that the error affects the party's substantial rights so that, but for the alleged error, a different result might reasonably have been reached." Id. "The inquiry is fact-dependent and requires us to evaluate the error in light of the entire record." Id.

At trial, Wynn requested a jury instruction based on Seeley that stated, generally, that an intoxicated person ratifies a contract if he does not disaffirm it within a reasonable time after becoming sober. The district court refused this instruction and gave one that instructed the jury that it "may" consider steps an intoxicated person took to disaffirm a debt.2

The district court refused Wynn's instruction because it interpreted the caselaw Wynn relied on differently than Wynn. While this court generally defers to a district court's decision on a jury instruction, the district court abused its discretion because its instruction was erroneous in that it incorrectly stated Nevada law oh contract ratification. The language in Seeley, while dicta, is an accurate statement of the rule regarding ratification. Further, additional caselaw from this and other jurisdictions supports Wynn's proposed instruction. See Merrill v. DeMott, 113 Nev. 1390, 1396-99, 951 P.2d 1040, 1044-45 (1997) (concluding there was ratification by conduct and agreement based on the parties' actionsand "apparent intent"); see also First State Bank of Sinai v. Hyland, 399 N.W.2d 894, 898 (S.D. 1987) ("[F]ailure of a party to disaffirm a contract over a period of time may, by itself, ripen into a ratification, especially if rescission will result in prejudice to the other party.").3 The district court's jury instruction of law was permissive when the law is affirmative.

This court must also consider whether the error was harmless. Wynn argues it was prejudiced because the jury did not award the entirety of the $800,000 Tofani borrowed, gambled, and lost. Thus, the issue remains whether but for the jury instruction given, a different result might have reasonably been reached. This is a fact-based inquiry that requires this court to review the record.

Tofani's trial testimony differs in a significant way from his deposition testimony relied upon during the litigation of the summary judgment motion. In his trial testimony, Tofani confirmed that when he left Wynn at the end of his September 2011 trip, it was his understanding that he owed Wynn $800,000. He also testified that he acknowledged Wynn was seeking repayment of markers in his emails between himself and Barbara Conway, Wynn's casino collections manager. He said he only decided not to pay Wynn back when the casino sent a letter about his debt to his house and his wife opened it (not because he did not owe the money).

As caselaw places an affirmative obligation on an intoxicated person who is aware of a contract to disaffirm it within a reasonable timeafter becoming sober because otherwise it is ratified, it is reasonable that a different result would have been reached if the jury was given the correct legal instruction. Specifically, it is reasonable that the jury would have taken the evidence and the correctly stated law and ruled that Tofani ratified the $800,000 debt and held him liable for the full amount. Therefore, the judgment upon the jury verdict is reversed and remanded for a new trial.

Tofani's cross-appeal

The district court properly precluded Tofani's alleged gambling addiction defense

Tofani argues on appeal and cross-appeal that the district court erred or abused its discretion and he did not receive a fair trial because the district court applied NRS 463.368(6) to the following proceedings: the district court's dismissal of his counterclaim, the district court's order denying Wynn's motion for partial summary judgment including an express finding that Tofani was prohibited from using his gambling addiction defense, the district court's granting of Wynn's motion in limine excluding evidence or argument of Tofani's gambling addiction, and the district court's denial of his proposed jury instruction regarding Tofani's alleged gambling addiction. Tofani further argues on cross-appeal that Wynn is equitably estopped from relying on "NRS 463.368(6) because it preyed on Mr. Tofani's ludomania or gambling addiction" and has unclean hands even though the verdict was one at law and not in equity.4

The district court precluded Tofani's alleged gambling defense in its order denying Wynn's motion for partial summary judgment. The order denying summary judgment is reviewed de novo. GES, 117 Nev. at 268, 21 P.3d at 13. Tofani contends he should have been able to argue that he has a gambling addiction. Wynn counters that NRS 463.368(6) bars that defense.

NRS 463.368(6) states:

A patron's claim of having a mental or behavioral disorder involving
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