-RJJ Morales v. Aria Resort & Casino, LLC, No. 2:2011cv02102 - Document 24 (D. Nev. 2012)
Court Description: ORDER Granting 9 Defendant's Motion to Dismiss. Plaintiff shall have 30 days to file an amended complaint. Signed by Judge Larry R. Hicks on 9/10/12. (Copies have been distributed pursuant to the NEF - EDS)
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-RJJ Morales v. Aria Resort & Casino, LLC Doc. 24 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** 9 YAMIL MORALES, 10 Plaintiff, 11 v. 12 ARIA RESORT & CASINO, LLC, 13 Defendant. ) ) ) ) ) ) ) ) ) ) 2:11-CV-02102-LRH-RJJ ORDER 14 Before the court is Defendant’s Motion to Dismiss (#91 ). Plaintiff filed an opposition (#18), 15 16 and Defendant replied (#20). 17 I. Facts and Procedural History 18 This action arises out of an Las Vegas casino’s alleged misconduct in its attempt to collect 19 on an unpaid gambling debt. On May 21, 2010, Plaintiff Yamil Morales, a citizen and resident of 20 Mexico, applied for and received $500,000 in gambling credit at the Aria Resort and Casino 21 through the issuance of markers. 22 Following standard industry practice, Morales completed a credit application setting forth, 23 inter alia, the name, address, routing number and account numbers at his bank. In conjunction with 24 the application, Morales also signed seven markers totaling $500,000—five for $50,000, one for 25 26 1 Refers to the court’s docket entry number. Dockets.Justia.com 1 $100,000, and one for $150,000. The date and bank information were left blank. Pursuant to the 2 terms of the credit application that Morales signed, he authorized Aria to complete the required 3 information on the markers, including the date, bank account and electronic encoding, and he 4 authorized Aria to draw the marker on “any account from which I now or may in the future have 5 the right to withdraw fund, [sic] regardless of whether that account now exists, and whether I 6 provided the information on the account” to the casino. Morales further certified that at the time he 7 signed the markers, he had sufficient funds on deposit to pay the markers upon demand or 8 presentment. Morales also waived “any requirement of presentment.” The application further 9 contained a warning that the markers are “identical to a personal check” and that drawing or 10 passing a marker “knowing that there are insufficient funds in an account upon which it may be 11 drawn, is a crime in the State of Nevada which may result in criminal prosecution in addition to 12 civil proceedings to collect the outstanding debt.” 13 14 15 During his visit to the casino, Morales lost approximately $500,000. He then departed for his home in Mexico without paying the debt outstanding. Morales alleges that on or about November 15, 2010, Aria unsuccessfully attempted to 16 redeem the markers. It completed the required information, including the date and bank 17 information, and it presented the markers for payment with the bank specified in Morales’ credit 18 application but on different account numbers than the two that Morales listed. Morales alleges that 19 the account on which the markers were presented had been disclosed by him to a different casino 20 “long ago” and had been closed approximately seven years earlier. Accordingly, the bank returned 21 the markers for the reason that the account was closed. 22 Morales alleges that Aria then referred the matter to the Clark County District Attorney’s 23 Office. On March 21, 2011, the District Attorney’s office issued to Morales a letter titled “Notice 24 of Bad Checks,” which indicated that it “has received . . . bad check(s) for prosecution,” listed the 25 seven Aria markers, noted that passing bad checks is a crime under NRS § 205.130, and threatened 26 2 1 criminal prosecution unless Morales submitted full payment of the $500,000 in checks, plus 2 “statutory administrative and penalty fees” totaling $50,200. Morales also received a second letter, 3 dated July 28, 2011, proposing that Morales stipulate to pay $530,200 under a payment plan to 4 avoid criminal prosecution. Morales did not agree to the stipulation and has not paid the 5 outstanding debt. 6 7 On November 17, 2011, Aria filed a civil lawsuit against Morales in state court on the $500,000 debt. That lawsuit is apparently still pending. 8 On December 28, 2011, Morales countered by filing this lawsuit against Aria in federal 9 court on the basis of diversity jurisdiction. The Complaint (#1) includes claims for (1) breach of 10 contract, (2) breach of the implied covenant of good faith and fair dealing, (3) abuse of process, (4) 11 defamation, and (5) extortion. Morales also includes a sixth claim for declaratory relief that is 12 derivative of the five substantive claims. Aria now moves to dismiss all claims. 13 II. 14 Legal Standard To survive a motion to dismiss for failure to state a claim under FRCP 12(b)(6), a complaint 15 must satisfy the Federal Rule of Civil Procedure 8(a)(2) notice pleading standard. See Mendiondo 16 v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008). A complaint must contain “a 17 short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 18 8(a)(2). The Rule 8(a)(2) pleading standard does not require detailed factual allegations; however, 19 a pleading that offers only “labels and conclusions” or “a formulaic recitation of the elements of a 20 cause of action” will not suffice. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell 21 Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 22 Furthermore, Rule 8(a)(2) requires a complaint to “contain sufficient factual matter, 23 accepted as true, to state a claim to relief that is plausible on its face.” Id. at 1949 (internal 24 quotation marks omitted). A claim has facial plausibility when the pleaded factual content allows 25 the court to draw the reasonable inference, based on the court’s judicial experience and common 26 3 1 sense, that the defendant is liable for the misconduct alleged. See id. at 1949-50. “The plausibility 2 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 3 defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a 4 defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to 5 relief.” Id. at 1949 (internal quotation marks and citation omitted). 6 In reviewing a motion to dismiss, the court accepts the facts alleged in the complaint as 7 true. Id. (citation omitted). However, “bare assertions . . . amount[ing] to nothing more than a 8 formulaic recitation of the elements of a . . . claim . . . are not entitled to an assumption of truth.” 9 Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951) 10 (alteration in original) (internal quotation marks omitted). The court discounts these allegations 11 because they do “nothing more than state a legal conclusion – even if that conclusion is cast in the 12 form of a factual allegation.” Id. (citing Iqbal, 129 S. Ct. at 1951.) “In sum, for a complaint to 13 survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from 14 that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Id. (quoting 15 Iqbal, 129 S. Ct. at 1949). 16 III. Discussion 17 A. Breach of Contract 18 Morales alleges that the credit application and markers constitute a contract that imposed 19 upon Aria the duties to present the markers in a timely fashion and against the accounts specified 20 by Morales in his credit application. Morales further alleges that Aria breached these duties by 21 presenting the markers after they had become stale 90 days after their issuance and against closed 22 accounts that were different than the ones he specified. 23 To the extent Morales’ breach of contract claim is predicated on an omission—specifically, 24 Aria’s failure to present the markers for payment within 90 days and against the specified 25 accounts—the claim fails because the contract includes no terms requiring Aria to ever present the 26 4 1 markers for payment. Indeed, in executing the credit application, Morales expressly agreed to 2 “waive any requirement of presentment.” Markers are merely instruments for collecting on a 3 gambling debt, as distinct from the debt itself, and redeeming a marker is not the only means by 4 which a gaming establishment may seek to collect on an outstanding debt. 5 Morales’ complaint can also be construed, however, to allege breach of contract based on 6 Aria’s actual presentment of the markers after they had allegedly become stale and on closed 7 accounts. Morales contends that once Aria decided to present the markers, it was required to do so 8 in a timely fashion and against valid accounts. While the credit application contains no time frame 9 for presentment, Morales contends that the markers are considered to be checks, see Nguyen v. 10 Nevada, 14 P.3d 515, 518 (Nev. 2000), and that as such they became stale 90 days after their date, 11 which in the case of an undated check is the date of issue, citing NRS §§ 104.3113(2), 12 104.3304(1)(b). Also, while the credit application expressly authorized Aria to draw the markers 13 on accounts other than those specified by Morales in the application, Morales contends this 14 authorization did not extend to accounts that had been closed years earlier, but only accounts that 15 Morales “now or may in the future have the right to withdraw funds.” 16 Although Aria contests Morales’ theories of duty and breach, the court need not resolve this 17 dispute. As Aria alternatively contends, even if Morales’ theory were correct, he fails to state a 18 claim for breach of contract because he has failed to allege that he suffered any actual damages as a 19 result of the alleged breaches. See Eaton v. J. H. Inc., 581 P.2d 14, 17 (Nev. 1978); Richardson v. 20 Jones, 1 Nev. 405, 408 (1865). Morales’ prayer for compensatory damages of $500,000 for breach 21 of contract is both inexplicable (it is Morales who borrowed and has failed to repay $500,000 in 22 gambling debts to Aria) and unsupported by any factual allegations whatsoever as to the occurrence 23 of such injury or its nexus to any alleged breach. The breach of contract claim shall be dismissed 24 accordingly. 25 26 5 1 B. Abuse of Process 2 The tort of abuse of process requires “(1) an ulterior purpose by the defendants other than 3 resolving a legal dispute, and (2) a willful act in the use of the legal process not proper in the 4 regular conduct of the proceeding.” Kovacs v. Acosta, 787 P.2d 368, 369 (Nev. 1990). Here, 5 Morales alleges that the District Attorney, acting as Aria’s agent, issued process in the form of a 6 notice of bad checks that threatened criminal prosecution, and that such process was issued 7 “without justification” and with the ulterior purpose of obtaining “the payment of an obligation that 8 had become void and unenforceable.” 9 Such allegations are inadequate for several reasons. To begin, it was the District Attorney, 10 not Aria, that issued the allegedly unjustified “process” at issue here. And Morales’ conclusory 11 allegations that the District Attorney was somehow subject to Aria’s control as its agent is 12 implausible and not entitled to a presumption of truth in the absence of factual content supporting 13 such an allegation. The mere facts that Aria reported the returned markers to the District Attorney 14 and that the District Attorney acted upon the report are insufficient to establish that Aria exercised 15 control over the District Attorney’s decision to act on a reported criminal offense. 16 But even if Aria were responsible for the issuance of the Notice of Bad Checks, the 17 necessary elements are still missing. First, Morales fails to allege an ulterior purpose other than 18 resolution of a legal dispute. Indeed, the overt purpose of the Notice of Bad Checks issued to 19 Morales was to resolve the bad check issue short of criminal prosecution by obtaining payment of 20 the underlying debt obligation to Aria. See Rashidi v. Albright, 818 F. Supp. 1354, 1359 (D. Nev. 21 1993). Second, Morales has made no allegation that the issuance of the letter and demand for 22 payment under threat of criminal prosecution was not proper in the regular conduct of a criminal 23 bad check proceeding by the District Attorney. It is well-established that the securing of gambling 24 credit on markers that are unsupported by sufficient funds may be referred to the district attorney 25 for criminal prosecution under Nevada’s bad check statute, NRS § 205.130. See Nguyen, 14 P.3d 26 6 1 2 at 517-18; Fleeger v. Bell, 95 F. Supp. 2d 1126, 1131 (D. Nev. 2000). Morales instead seeks to argue the merits of the proceeding in which the process was issued 3 by alleging that the debt obligation sought to be collected “had become void and unenforceable” 4 and that the Notice of Bad Checks was issued “without justification.” Such allegations are 5 predicated upon the same arguments asserted in support of Morales’ breach of contract claim—the 6 markers had become stale and were issued on the wrong accounts. But both arguments are 7 unavailing. Morales first erroneously conflates the markers with the debt. Even if the markers are 8 now unredeemable because Aria failed to timely or correctly present the markers for payment, that 9 says nothing of the validity or enforceability of the underlying $500,000 gambling debt. Also, 10 while Morales makes much of Aria’s presentment of the markers on the “wrong” accounts, it does 11 not follow that the markers were not in fact “bad” checks subject to referral for criminal 12 prosecution. Significantly, the complaint includes no factual allegations that the markers were 13 adequately backed by sufficient funds on deposit in the “right” accounts listed in the credit 14 application and that the markers would have been honored had they been presented on those 15 accounts. Unless that was the case, the markers would have been “bad” checks from the inception, 16 regardless of presentment or any mistakes in presentment. Because the complaint includes no 17 allegations that the markers were “good” checks backed by sufficient funds in the listed accounts, 18 the court declines to accept as true Morales’ conclusory allegation that the threat of criminal 19 prosecution was unjustified. 20 21 Finally, despite Morales’ attempt to argue damages in his opposition brief, his complaint includes no factual allegations that he suffered any injury as a result of the alleged abuse of process. 22 For all these reasons, Morales fails to state a viable claim for abuse of process. 23 C. Defamation 24 The elements of a defamation claim are “(1) a false and defamatory statement of fact by the 25 26 defendant concerning the plaintiff; (2) an unprivileged publication to a third person; (3) fault, 7 1 amounting to at least negligence; and (4) actual or presumed damages.” Pope v. Motel 6, 114 P.3d 2 277, 282 (Nev. 2005). A false statement involving the imputation of a crime is considered to be 3 defamatory per se and therefore actionable without proof of damages. Id. 4 Here, Morales alleges that “Aria, acting through its legal department, has made and repeated 5 numerous false statements about Sr. Morales to the effect that he committed a criminal offence 6 against Aria.” Morales further alleges that these false statements were made to “members of the 7 public, the staff of Aria, the staff of other casinos, the staff of the office of the District Attorney, 8 customers of Aria who are members of the general public to whom Sr. Morales is known, and 9 citizens of Mexico who are members of the general public to whom Sr. Morales is know.” 10 The court finds that Morales has failed to include in his complaint sufficient factual 11 allegations to establish that the alleged defamatory statements were, in fact, false. As discussed 12 above, Morales has failed to allege that the markers were “good” checks because he had on deposit 13 in the listed accounts sufficient funds to pay the markers upon demand or presentment. Unless that 14 was the case, any statements by Aria that Morales had committed a criminal offense by passing bad 15 checks were true. See NRS § 205.130; Nguyen, 14 P.3d at 517-18; Fleeger, 95 F. Supp. 2d at 16 1131. 17 Other deficiencies also require dismissal of Morales’ defamation claim. For instance, any 18 statements made to Aria employees are also not actionable, as Aria’s communications with its own 19 employees are not publications to third parties. Also, any statements made to the District 20 Attorney’s office concerning the commission of a criminal offense are absolutely privileged as 21 preliminary to judicial proceedings. See Fink v. Oshins, 49 P.3d 640, 644 (Nev. 2002); Circus 22 Circus Hotels v. Witherspoon, 657 P.2d 101, 104 (Nev. 1983); cf. Pope, 114 P.3d at 282-83 23 (holding that informal complaints to police officers are protected only by a conditional, not 24 absolute, privilege because such statements are not properly deemed to be preliminary to a judicial 25 proceeding). 26 8 1 As for the other alleged recipients of Aria’s allegedly defamatory communications, the court 2 finds that Morales’ allegations are too vague to state an actionable claim for defamation. His 3 allegations are the rough equivalent of alleging that Aria made defamatory statements to somebody, 4 somewhere. Notwithstanding the flexibility of the Rule 8 pleading standard, such allegations 5 constitute little more than labels and conclusions or a formulaic recitation of the elements. As 6 such, they give the defendant insufficient notice of the allegations against it and are not entitled to a 7 presumption of truth by the court. 8 Morales’ defamation claim will be dismissed accordingly. 9 D. Extortion 10 Morales next claims that Aria committed extortion by having the District Attorney threaten 11 criminal proceedings against Morales to force him to pay a gambling debt that was invalid and 12 unenforceable. Morales contends that such conduct constitutes extortion within the meaning of 13 Nevada’s criminal statute, NRS § 205.320, and that it is actionable under the common law. 14 As Aria contends, however, NRS § 205.320 provides no express private right of action for 15 extortion, and Morales has failed to cite any Nevada authority recognizing extortion as a viable 16 cause of action under the common law. Generally, “when a statute does not expressly provide for a 17 private cause of action, the absence of such a provision suggests that the Legislature did not intend 18 for the statute to be enforced through a private cause of action.” Richardson Constr., Inc. v. Clark 19 Cnty. Sch. Dist., 156 P.3d 21, 23 (Nev. 2007); cf. Hall v. Montgomery Ward & Co., 252 N.W.2d 20 421, 423-24 (Iowa 1977) (recognizing a private right of action for extortion despite the general rule 21 only because an Iowa statute overrides the ordinary common law rule). 22 Moreover, even if the action was recognized, Morales has failed to state a claim for 23 extortion because his premise that Aria sought to obtain payment on an invalid and unenforceable 24 debt is unsupported by the factual allegations in the complaint, as discussed above. 25 26 9 1 E. Breach of the Implied Covenant of Good Faith and Fair Dealing 2 Morales alleges that Aria breached its duty of good faith “when it delinquently presented 3 [the markers] against the Wrong Accounts and when it wrongfully attempted to extort payment 4 from Sr. Morales by soliciting the services of the District Attorney to collect on the markers.” In 5 other words, this claim is predicated upon the same allegations and arguments already discussed 6 and rejected above. Also, as with Morales’ other claims, he once again fails to include any 7 allegation that he incurred damages as a result of the alleged breaches. The claim will be dismissed 8 accordingly. 9 10 F. Declaratory Relief Morales’ sixth and final claim for declaratory relief is merely derivative of his other five 11 claims for relief. Given the dismissal of those claims, there are no issues remaining for the 12 issuance of declaratory relief. The claim shall be dismissed accordingly. 13 IV. Conclusion 14 15 IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss (#9) is GRANTED. Plaintiff shall have 30 days to file an amended complaint, if he chooses to do so. 16 IT IS SO ORDERED. 17 DATED this 10th day of September, 2012. 18 19 __________________________________ LARRY R. HICKS UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 10
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