Sierra Development Company v. Chartwell Advisory Group Ltd., No. 3:2013cv00602 - Document 578 (D. Nev. 2016)
Court Description: ORDER granting ECF No. 530 Motion for Summary Judgment in favor of the Counterclaim Defendants Caesars entities on the Fourth and Fifth Counterclaims based on contract; denying ECF No. 530 Motion for Summary Judgment on the Sixth Counterclaim based on unjust enrichment; dismissing Caesars Entertainment Corporation as a Counterclaim Defendant. Signed by District Judge Roger T. Benitez on 12/14/2016. (Copies have been distributed pursuant to the NEF - KR)
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Sierra Development Company v. Chartwell Advisory Group Ltd. Doc. 578 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 DISTRICT OF NEVADA 11 12 SIERRA DEVELOPMENT CO. Plaintiff, 13 14 vs. 15 16 17 18 CHARTWELL ADVISORY GROUP, LTD. 19 Defendant. 20 ORDER GRANTING IN PART MOTION FOR SUMMARY JUDGMENT FOR CAESARS ENTERTAINMENT CORPORATION, HARRAH’S LAS VEGAS, LLC, HARRAH’S LAUGHLIN, LLC, AND RIO PROPERTIES, LLC, COUNTERCLAIM DEFENDANTS, AGAINST CHARTWELL ADVISORY GROUP, LTD, COUNTERCLAIMANT ----------------------------------------------- 21 CASE NO. 13cv602 BEN (VPC) CHARTWELL ADVISORY GROUP, LTD. 22 Counterclaimant, 23 24 25 26 [Dkt. # 530] vs. SIERRA DEVELOPMENT CO., et al., Counterdefendants. 27 28 -1Dockets.Justia.com 1 Now before the Court is the Motion for Summary Judgment of Caesars 2 Entertainment Corporation, Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, and 3 Rio Properties, LLC, Counterclaim Defendants, Against Chartwell Advisory Group, 4 Ltd, Counterclaimant. Caesars Entertainment Corporation is not a signatory to any 5 contract with Chartwell. It asks to be dismissed. That request is granted. Chartwell 6 has not pointed to admissible evidence that Caesars Entertainment Corporation has 7 any contract or other legal relationship with Chartwell. As such, its claims for 8 breach of contract and breach of the duty of good faith and fair dealing that is a part 9 of every contract has no basis. Moreover, Caesars Entertainment Corporation is not 10 a sales or use tax payer so any argument that it is unjustly enriched by virtue of 11 Chartwell allegedly orchestrating a tax moratorium, would offer no benefit with 12 which to be unjustly enriched. To the extent Caesars Entertainment Corporation 13 exercised control over a subsidiary, Caesars Entertainment Operating Company, that 14 entity is in in bankruptcy proceedings. An examiner’s report filed in that 15 bankruptcy proceeding is not admissible in this case for the truth of the statements 16 made therein. In sum, there is no evidentiary basis for any of Chartwell’s 17 counterclaims against Caesars Entertainment Corporation and it is hereby, 18 dismissed. 19 Harrah’s Las Vegas, LLC is the successor in interest to Harrah’s Las Vegas, 20 Inc. Harrah’s Laughlin, LLC is the successor in interest to Harrah’s Laughlin, Inc. 21 Rio Properties, LLC is the successor in interest to Rio Properties, Inc.1 These three 22 Counterclaim defendants are referred to herein as the Caesars entities. 23 Chartwell asserts three counterclaims against the Caesars entities in its 24 Second Amended Answer and Counterclaim: (1) breach of contract (fourth claim), 25 (2) breach of the duty of good faith and fair dealing (fifth claim), and (3) unjust 26 27 1 See Motion to Dismiss Defendant/Counterclaimant Chartwell Advisory Group, 28 Ltd’s Answer, Affirmative Defenses and Counterclaims (dkt # 108, filed Feb. 21, 2014) at 8 & n. 9-12. -2- 1 enrichment (sixth claim). The Court finds there are no genuine issues of material 2 fact as to the first two claims and grants summary judgment to the counterclaim 3 defendants. As to the unjust enrichment claim, however, genuine issues of material 4 fact exist. 5 Background 6 This case concerns taxes owed to the State of Nevada when a gaming casino 7 or restaurant provides a meal to a patron or an employee on a complimentary basis. 8 Apparently, gaming makes people hungry, because tax refund requests for use 9 taxes2 paid on those complimentary meals for just the years 2001 through 2008 10 totaled 233 million dollars. Chartwell, an accounting firm, saw a way early on to 11 argue for refunds of the use tax collected on complimentary meals. So, Chartwell 12 approached these Counterclaim defendants and many other Nevada casinos with a 13 proposition: “Let us pursue a use tax refund for you and if we succeed, you pay us a 14 percentage of the tax refund.” Form contracts (titled Professional Services 15 Agreement) were drafted by Chartwell and signed by casino clients. Chartwell went 16 to work. Numerous use tax refund requests were submitted to the Nevada 17 Department of Taxation. Lawsuits were filed to test the refund theory. In 2008, the 18 Nevada Supreme Court ruled that the State of Nevada could not lawfully impose a 19 use tax on complimentary meals. See Sparks Nugget Inc. v. State of Nevada ex rel. 20 Dep’t. of Taxation, 179 P.3d 570 (Nev. 2008). Chartwell cheered. 21 However, while closing the window on the collection of use taxes, the 22 Nevada Supreme Court opened a door for the collection of sales taxes on these same 23 complimentary meals. Id. at n.15 (“Still, we do not foreclose the possibility that 24 complimentary meals such as the ones at issue in this case may be subject to sales 25 26 2 See e.g., N.R.S. 372.185 (“1. An excise tax is hereby imposed on the storage, use or other consumption in this State of tangible personal property purchased from any 27 retailer on or after July 1, 1955, for storage, use or other consumption in this State at the rate of 2 percent of the sales price of the property. 28 2. The tax is imposed with respect to all property which was acquired out of state in a transaction that would have been a taxable sale if it had occurred within this State.”). -3- 1 tax where consideration is properly demonstrated.”). The State pushed through the 2 new doorway. The Nevada Department of Taxation began assessing deficiency 3 amounts for unpaid sales tax.3 Because the use tax was computed on the wholesale 4 value of the meal, while sales tax is computed on the retail value of the meal, a 5 casino or restaurant faced an even larger sales tax liability. Chartwell did not 6 anticipate that tax twist. Neither did the PSA contracts. More litigation followed 7 with varying results. In 2013, a grand industry-wide settlement was reached. 8 Chartwell did not see that coming either. See Deviney Deposition, at 154-155, Exh. 9 1A to Caesars entities Motion for Summary Judgment (“To jump to the chase, we 10 never expected a settlement would take place. . . . We never envisioned that at this 11 point in time. . . . We thought the state would ultimately agree with us or we would 12 lose and we were wrong.”). In essence, the casinos agreed to withdraw their use tax 13 refund requests and the Nevada Department of Taxation agreed to withdraw its sales 14 tax deficiencies, in expectation that the Nevada legislature would pass legislation 15 creating a sales tax moratorium on complimentary meals through the year 2019. It 16 was a “walk away” agreement. Legislation was passed. For the Caesars entities, it 17 was now clear sailing ahead until at least 2019. Chartwell invoiced its clients. The 18 Caesars entities declined to pay the professional services fee. All of this is 19 essentially undisputed by the parties. 20 Legal Standards 21 Summary judgment is appropriate when “there is no genuine dispute as to any 22 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 23 Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 24 (1986). “Credibility determinations, the weighing of the evidence, and the drawing 25 26 3 The use tax / sales tax dichotomy can be thought of as two sides of the same tax coin. “The Nevada use tax is complementary to the sales tax imposed on retail 27 purchases made in this state.” Harrah’s Operating Co. v. State, Dep’t of Taxation, 321 P.3d 850, 852 (Nev. 2014). 28 -4- 1 of legitimate inferences from the facts are jury functions, not those of a judge . . . . 2 The evidence of the non-movant is to be believed, and all justifiable inferences are 3 to be drawn in his favor.” Anderson, 477 U.S. at 255 (citing Adickes v. S.H. Kress 4 & Co., 398 U.S. 144, 157 (1970)). However, the inferences that may be drawn are 5 not limitless. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 6 632 (9th Cir. 1987). Inferences must be based on specific facts and only “‘rational’ 7 and ‘reasonable’” inferences may be drawn. Id.; United Steelworkers of Am. v. 8 Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989). 9 A moving party bears the initial burden of showing there are no genuine 10 issues of material fact. Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th 11 Cir. 2007) (citing T.W. Elec. Serv., Inc., 809 F.2d at 630). The moving party can do 12 so by negating an essential element of the non-moving party’s case, or by showing 13 that the non-moving party failed to make a showing sufficient to establish an 14 element essential to that party’s case, and on which the party will bear the burden of 15 proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986). As this is the 16 motion of the Counterclaim defendants, this is the approach the movants take here. 17 “Only disputes over facts that might affect the outcome of the suit under the 18 governing law will properly preclude the entry of summary judgment. Factual 19 disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. 20 at 248. As a general rule, the “mere existence of a scintilla of evidence” will be 21 insufficient to raise a genuine issue of material fact; there must be evidence on 22 which the jury could reasonably find for the non-moving party. Id. at 252. 23 “Summary judgment procedure is properly regarded not as a disfavored procedural 24 shortcut, but rather as an integral part of the Federal Rules as a whole, which are 25 designed ‘to secure the just, speedy and inexpensive determination of every 26 action.’” Celotex Corp., 477 U.S. 327 (quoting Fed. R. Civ. P. 1). 27 Choice of Law – Nevada State Law 28 To determine the applicable substantive law, a federal court sitting in -5- 1 diversity must apply the choice-of-law rules of the forum. Narayan v. EGL, Inc., 2 616 F.3d 895, 898 (9th Cir. 2010). Nevada’s choice-of-law principles allow parties 3 “within broad limits to choose the law that will determine the validity and effect of 4 their contract” so long as the fixed situs has a substantial relation with the 5 transaction and is not contrary to the public policy of the forum. Progressive Gulf 6 Ins. Co. v. Faehnrich, 752 F.3d 746, 751 (9th Cir. 2014).4 The contracts between 7 Chartwell and the Counterclaim defendants Caesars entities provide that the law of 8 Nevada is to be applied. Therefore, the Court finds that Nevada law applies. 9 10 Breach of Contract– the Fourth Counterclaim for Relief To state a claim for breach of contract in Nevada, a plaintiff must 11 demonstrate: (1) the existence of a valid contract; (2) that plaintiff performed or was 12 excused from performance; (3) that the defendant breached the contract; and (4) that 13 the plaintiff sustained damages. Calloway v. City of Reno, 1993 P.2d 1259, 1263 14 (2000). Interpreting an unambiguous contract is generally a question of law. 15 Galardi v. Naples Polaris, LLC, 301 P.3d 364, 366 (Nev. 2013). In Nevada, 16 contractual construction is a question of law and “suitable for determination by 17 summary judgment.” Ellison v. California State Auto. Ass’n, 797 P.2d 975, 977 18 (Nev. 1990). “It has long been the policy in Nevada that absent some 19 countervailing reason, contracts will be construed from the written language and 20 enforced as written.” Id. On the other hand, summary judgment is improper if the 21 court must use extrinsic evidence to determine the meaning of an ambiguous term 22 within the contract. Dickenson v. State, Dep’t of Wildlife, 877 P.2d 1059, 1061 23 (Nev. 1994). 24 A contract is ambiguous if its terms may reasonably be interpreted in more 25 4 In the absence of a contract provision, Nevada courts apply the “substantial 26 relationship” test. Consol. Generator–Nev., Inc. v. Cummins Engine Co., 971 P.2d 1251, 1253 (Nev. 1998). To determine whether a state has a substantial relationship 27 with a contract, a court considers the following five factors: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; 28 (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation, and place of business of the parties. Id. at 1253–54. -6- 1 than one way, but ambiguity does not arise simply because the parties disagree on 2 how to interpret their contract.” Galardi, 301 P.3d at 366. “Rather, an ambiguous 3 contract is an agreement obscure in meaning, through indefiniteness of expression 4 or having a double meaning.” Id. (internal quotation marks omitted). In other 5 words, once this Court initially determines that “the language of the contract is clear 6 and unambiguous, the contract is enforced as written.” Am. First Fed. Credit Union 7 v. Soro, 359 P.3d 105, 106 (Nev. 2015). “[I]f no ambiguity exists, the words of the 8 contract must be taken in their usual and ordinary signification.” Traffic Control 9 Servs., Inc. v. United Rentals Nw., Inc., 87 P.3d 1054, 1059 (Nev. 2004) (internal 10 quotation marks omitted). 11 According to the ordinary significance of the terms of the contract, Chartwell 12 would earn a fee equal to a percentage of the “Total Refund” recovered by the 13 casino client. For example, in the PSA between Chartwell and Harrah’s Las Vegas, 14 Inc. (dated Feb. 10, 2004), Article 4.A states that: “Chartwell’s fee for services 15 rendered to Client shall be twenty percent (20%) of the Total Refund for 16 complimentary food items.” “Total Refund” is defined in Article 1.H as follows: 17 “The Total Refund shall include all refunded sales and use taxes, interest and 18 penalties for complimentary food items filed as a result of the efforts of Chartwell.” 19 “Refund” has a plain meaning. According to Black’s Law Dictionary (Ninth 20 edition), the first meaning of the term “refund” is: “the return of money to a person 21 who overpaid, such as a taxpayer who overestimated tax liability or whose employer 22 withheld too much tax from earnings.” The second meaning is similar: “the money 23 returned to a person who overpaid.” A refund is a return of money. This much is 24 plain. And because it is plain, the term may be interpreted by a court without resort 25 to extrinsic evidence. A tax refund of a fixed amount of money is the basis upon 26 which the professional services fee was to be calculated: “Chartwell’s fee for 27 services . . . shall be twenty percent (20%) of the Total Refund for complimentary 28 food items.” Without a tax refund of a specific amount, there was no fee to be -7- 1 calculated. This is a typical agreement with typical contingency fee terms based on 2 a typical expectation of likely events. The contract makes clear that Chartwell’s fee 3 is dependent upon recovering refund money for its client: “It is understood and 4 agreed that the services rendered by Chartwell are upon a contingent fee basis and, 5 if no amounts are recoverable, Client shall not be indebted to Chartwell for any 6 fees or costs whatsoever.” Article 2.B. 7 The evidence is undisputed as to the Caesars entities that none received a tax 8 refund in the form of money returned or even a formal credit against future taxes. 9 What they did receive is the benefit of a sales and use tax moratorium until at least 10 2019. Whether that benefit was due to Chartwell’s efforts or independent actors and 11 events, or a mixture of both, is the subject of the unjust enrichment claim. The 12 benefit may be worth a significant amount of money. A tax moratorium though, 13 however beneficial, is not encompassed within the contract definition of a Total 14 Refund. Because no tax refund was received in the form of money or credit, no fee 15 for services was due under the agreement. 16 Chartwell offers no evidence to the contrary. Instead, it argues that the 17 economic reality is the equivalent of a refund; that its efforts to pursue use tax 18 refunds, and the resulting events that culminated in the industry-wide settlement 19 agreement and tax moratorium, changed reality such that these Counterclaim 20 defendants did receive a refund. It is the economic equivalent of a refund upon 21 which their fees are due, according to Chartwell. While it may be an economic 22 reality, this type of a “refund” is beyond the contract definition of the “Total 23 Refund.” The legal reality is that the Counterclaim defendants did not receive a 24 refund of use or sales taxes paid on complimentary meals. Because they received 25 no money refund, no genuine issue of material fact remains. No professional 26 services fee was earned. 27 Chartwell advances several arguments to the contrary. First, it argues that the 28 Caesars entities exchanged their right to a money refund for legislative relief. But it -8- 1 was never finally determined that the Caesars entities were entitled to a cash tax 2 refund of any amount. What it did exchange is the uncertainty of litigation over use 3 vs. sales taxation on complimentary meals, on the one hand, for the certainty of no 4 additional liability looking backward or looking forward at least until 2019. 5 Chartwell simply argues that the Sparks Nugget decision required the 6 Department of Taxation to pay the use tax refund to the Caesars entities.5 But with 7 this argument, Chartwell overlooks the significance of the Department of Taxation’s 8 deficiency assessments for unpaid sales tax. Where Chartwell’s client wins the right 9 to a use tax refund, but as a result faces an equal or larger sales tax liability, it 10 cannot be said that the client received any benefit of the contracted-for bargain. To 11 interpret the professional services fee provision based on only one side of the 12 taxation equation would clearly render the contractual promise illusory. Obviously, 13 obtaining a refund right, only to face an equal or greater tax liability, against which 14 the refund will be offset, would gain nothing for the Caesars entities. That 15 Chartwell would ask to be paid for obtaining such a result would have as its basis an 16 unenforceable illusory promise. The illusory promises doctrine “instructs courts to 17 avoid constructions of contracts that would render promises illusory because such 18 promises cannot serve as consideration for a contract.” M & G Polymers USA, LLC 19 v. Tackett, 135 S. Ct. 926, 936 (2015) (citing 3 Williston § 7:7 (4th ed. 2008)). That 20 the Department of Taxation would offset a use tax refund against its concomitant 21 sales tax deficiency was no pipe dream. In Harrah’s litigation against the State, the 22 Nevada state district court ruled that “the State can offset any refund of use tax due 23 to Harrah’s with sales tax that was imposed pursuant to a timely deficiency 24 determination.” Harrah’s Entertainment Inc. Group, et al. v. Nevada, et al., slip op. 25 at *7, Case No. 12 C 264 1B (1st Judicial District Court of Nevada Apr. 25, 2013) 26 5 The argument oversimplifies the legal questions facing the courts. See e.g., 27 Sparks Nugget, 179 P.3d 570 at n.31 (“Moreover, this case is far more complex than the dissent suggests because it requires not only our interpretation of Nevada’s 28 constitutional directive exempting food from use taxation, but also our understanding of the ever-elusive use tax’s application.”). -9- 1 (Tab “I,” Chartwell’s Combined Appendix). Consequently, any potential right to a 2 use tax refund for the Caesars entities had potentially little or no value. Whatever 3 value it had, it was not contemplated by the contract. If it were included in the 4 terms of the contract (which it is not), it would be an unenforceable illusory contract 5 term. 6 Chartwell also argues that this Court has already ruled that the term “refund” 7 is ambiguous in the ruling on the motion to dismiss by the Hon. Richard F. 8 Boulware, II. (p. 22:5-11, Tab “O,” Chartwell’s Combined Appendix). However, 9 that ruling concerned whether it was at least plausible that the settlement agreement 10 benefits constituted a refund. It was a plausible theory. However, it was a 11 conclusion without the benefit of an evidentiary record. That ruling for purposes of 12 a motion to dismiss does not bind the Court now for summary judgment. Moonin v. 13 Nevada ex rel. Dept. of Public Safety Highway Patrol, 2015 WL 4113289, *6 (D. 14 Nev. 2015) (citing Pearson v. Dennison, 353 F.2d 24, 28 (9th Cir.1965)). Now, it is 15 clear that there is no evidence to support the theory. There is no evidence that the 16 contract contains other terms that state or imply that a settlement agreement and a 17 future tax moratorium would be included in the contractual concept of a Total 18 Refund. 19 The motion for summary judgment is granted on the breach of contract claim 20 in favor of the Caesars entities. 21 Breach of the Duty of Good Faith and Fair Dealing – the Fifth 22 Counterclaim for Relief 23 Every contract in Nevada contains an implied duty of good faith and fair 24 dealing and essentially forbids arbitrary, unfair acts by one party that disadvantage 25 the other. Frantz v. Johnson, 999 P.2d 351, 362 n. 4 (Nev. 2000); Hilton Hotels, 26 Inc. v. Butch Lewis Prods., 862 P.2d 1207, 1209 (Nev. 1993). “A breach of the 27 covenant arises where the terms of a contract are literally complied with but one 28 party to the contract deliberately countervenes the intention and spirit of the - 10 - 1 contract.” Gunter v. United Fed. Credit Union, No. 15cv483-MMD-WGC, 2016 2 WL 3457009, at *2 (D. Nev. June 22, 2016) (citation omitted). 3 Chartwell asserts that the Caesars entities evaded the spirit of the contract and 4 interfered with Chartwell’s performance. Specifically, the Caesars entities did so by 5 settling the refund claims with the Department of Taxation. In Chartwell’s view, 6 the settlement relieved the State from making a cash payment but allowed the 7 Caesars entities to realize the economic value of Chartwell’s work. 8 In support of its claim, Chartwell points to Exhibit 19, Exhibit 30, and the 9 Floyd deposition (pgs. 257-263). Exhibit 19 is a memorandum from Carol Tabrizi. 10 It notes there are potential gains and losses of continuing the use tax refunds and 11 sales tax fights. It describes the uncertainties. It notes that use tax refunds had not 12 yet been received. Exhibit 30 simply indicates one writer’s displeasure that some of 13 Chartwell’s clients appeared to be benefitting more than other businesses. The 14 Floyd deposition simply provides commentary about Exhibit 19. It notes that 15 Chartwell might be due professional services fees in the event refunds were to be 16 actually received. 17 The problem with Chartwell’s argument is that the settlement was desired by 18 the State of Nevada, encouraged by Chartwell (as suggested by Exh. 30), and 19 required the independent approval of the state legislature in the form of tax 20 moratorium legislation. The State of Nevada desired a global settlement of all use 21 tax refund cases. The legality of imposing sales tax deficiencies to offset use tax 22 refunds was uncertain. Test cases had been instituted and decisions had been issued 23 at the trial court level. The Nevada appellate courts had yet to weigh in. Statute of 24 limitations issues existed. The State of Nevada might have ultimately won approval 25 of its sales tax deficiency program. In that case it would have traded the right to 26 collect use taxes for the right to impose even higher sales taxes and completely 27 offset any refund liability. Or it could have lost. (After all, justifying a sales tax on 28 a meal that is given away is not the most robust taxation theory.) Had the state lost - 11 - 1 in the appellate courts, the 233 million dollar use tax refund liability would remain 2 and would have grown even larger due to accumulating interest over time. 3 Instead of upping the ante on a high stakes legal bet, the State of Nevada 4 sought to settle the uncertainty of the past taxation issues. To make it work, the 5 casinos withdrew their use tax claims and the State withdrew its sales tax deficiency 6 claims and its right to offset one against the other. Perhaps the casinos were more 7 willing to gamble on a favorable outcome in the appellate courts, so the State 8 offered additional value. The Governor’s Office used its persuasion on the 9 Legislature to pass a tax moratorium until 2019. That offered potential value to the 10 casinos and restaurants going forward, making the global settlement more attractive. 11 In short, it was a global settlement at the instigation of the State. It required the 12 agreement of the State. It required legislation to be considered and passed by the 13 Legislature. There is no evidence that it was a settlement at the instigation of the 14 Caesars entities. Nor is there evidence that it was something the Caesars entities 15 could have accomplished on their own just to frustrate Chartwell’s ability to collect 16 its contingency fee. There is no evidence that demonstrates the Caesars entities 17 evaded the spirit of the Chartwell contracts or interfered with Chartwell’s 18 performance. 19 Finally, the contracts provided that the Caesars entities were free to stop 20 pursuing use tax refunds at any time without owing Chartwell a fee. They did that. 21 The Caesars entities exercised their contractual right to terminate the contracts in 22 2008 – long before signing the settlement agreement with the State. (Second 23 Amended Answer and Counterclaim, at paragraph 88; Exh 32, Index of Documents 24 submitted in support of Caesars entities motion.) There is no genunine issue of 25 material fact to support Chartwell’s claim of breach of the duty of good faith and 26 fair dealing. The motion for summary judgment is granted on the breach of the duty 27 of good faith and fair dealing in favor of the Caesars entities. 28 Unjust Enrichment – the Sixth Counterclaim for Relief - 12 - 1 Unjust enrichment occurs when one party confers a benefit on a second party 2 which accepts and retains the benefit under circumstances such that it would be 3 inequitable to retain the benefit without paying for its value. Certified Fire Prot. 4 Inc. v. Precision Constr., 283 P.3d 250, 257 (Nev. 2012) (“Unjust enrichment exists 5 when the plaintiff confers a benefit on the defendant, the defendant appreciates such 6 benefit, and there is acceptance and retention by the defendant of such benefit under 7 circumstances such that it would be inequitable for him to retain the benefit without 8 payment of the value thereof.”). It reaches beyond retention of money. Id. (The 9 benefit “can include services beneficial to or at the request of the other, denotes any 10 form of advantage, and is not confined to retention of money or property.”). “The 11 doctrine of unjust enrichment or recovery in quasi contract applies to situations 12 where there is no legal contract but where the person sought to be charged is in 13 possession of money or property which in good conscience and justice he should 14 not retain but should deliver to another or should pay for.” Leasepartners Corp. v. 15 Robert L. Brooks Trust Dated Nov. 12, 1975, 942 P.2d 182, 187 (Nev. 1997) 16 (quoting 66 Am. Jur. 2d Restitution § 11 (1973)). Here, there is evidence that the 17 tax moratorium is a valuable benefit enjoyed by the Caesars entities, conferred upon 18 them at least in part by Chartwell’s work in pursuing use tax refunds industry wide, 19 pursuing litigation favorable to casinos, and assisting the State of Nevada in 20 structuring a global settlement and persuading the manifold casinos with refund 21 claims to accept the settlement. 22 The Caesars entities argue that Chartwell cannot pursue the unjust enrichment 23 claim as a matter of law where there is also an existing contract. McKesson HBOC, 24 Inc. v. New York State Common Ret. Fund, Inc., 339 F.3d 1087, 1091 (9th Cir. 25 2003) (a party cannot seek recovery under an unjust enrichment theory if a contract 26 is the measure of the plaintiff’s right); Leasepartners Corp., 942 P.2d at 187 (action 27 based on theory of unjust enrichment not available where there is an express, 28 written contract, because no agreement can be implied when the agreement is - 13 - 1 express). Chartwell argues that Nevada courts permit unjust enrichment claims 2 where a contract has expired, or where the benefit conferred was different from the 3 benefit for which the contract was formed. Here, it appears Nevada law would 4 permit an unjust enrichment claim since the benefit conferred (the industry-wide 5 pursuit of tax relief, the facilitation of a global settlement agreement, and the 6 resulting multi-year tax moratorium) was vastly different in scope and kind from the 7 contracted-for benefit of a tax refund for only the Caesars entities. 8 Undeterred, the Caesars entities argue that the four-year statute of limitations 9 on unjust enrichment claims bars the Chartwell claim. “The statute of limitation for 10 an unjust enrichment claim is four years.” In re Amerco Derivative Litig., 228, 252 11 P.3d 681, 703 (Nev. 2011) (citing NRS 11.190(2)(c)). They argue that the 12 limitations period should run from 2008 when Chartwell argues that it became 13 entitled to the contracted professional services fee. It is the movant’s burden to 14 demonstrate the absence of a genuine issue of material fact as to when a party 15 should have discovered the facts underlying its claim when the movant is seeking 16 summary judgment on grounds of a statute of limitations. Oak Grove Inv’rs v. Bell 17 & Gossett Co., 668 P.2d 1075, 1079 (Nev. 1983), disapproved on other grounds by 18 Calloway v. City of Reno, 993 P.2d 1259 (Nev. 2000). “Determinations as to the 19 time when a plaintiff knew or should have known of [the basis for his claim], and 20 the time when a plaintiff suffered damages . . . are questions of fact for the trier of 21 fact.” Havas v. Engebregson, 633 P.2d 682, 684 (Nev. 1981); In re Amerco 22 Derivative Litig., 228, 252 P.3d at 703 (“A determination of when the plaintiff knew 23 or in the exercise of proper diligence should have known of the facts constituting 24 the elements of his cause of action is a question of fact for the trier of fact.”) 25 (internal quotations and citations omitted). Chartwell does not assert that this is the 26 triggering date for the unjust enrichment claim. For the unjust enrichment claim, 27 there is substantial evidence that the benefit allegedly conferred and retained was 28 the result of the State settlement agreement which took place in 2013. The unjust - 14 - 1 enrichment claim was also filed in 2013. Thus, the Caesars entities are not entitled 2 to summary judgment based upon the claim being barred by the statute of 3 limitations. 4 The evidence creates genuine issues of material fact concerning whether the 5 Caesars entities received a valuable benefit in the form of the State settlement 6 agreement and tax moratorium conferred upon them by the efforts of Chartwell and 7 for which it would be unjust to retain without payment to Chartwell. The motion 8 for summary judgment is denied on the unjust enrichment claim against the Caesars 9 entities. 10 Conclusion 11 Summary judgment is granted in favor of the Counterclaim defendants 12 Caesars entities on the Fourth and Fifth Counterclaims based on contract. Summary 13 judgment is denied on the Sixth Counterclaim based on unjust enrichment. Caesars 14 Entertainment Corporation is dismissed as a Counterclaim defendant. 15 DATED: December 14, 2016 16 17 Hon. Roger T. Benitez United States District Judge 18 19 20 21 22 23 24 25 26 27 28 - 15 -
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