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Sierra Development Co. v. Chartwell Advisory Group Ltd.

United States District Court, D. Nevada

January 13, 2017

SIERRA DEVELOPMENT CO. Plaintiff,
v.
CHARTWELL ADVISORY GROUP, LTD. Defendant. CHARTWELL ADVISORY GROUP, LTD. Counterclaimant,
v.
SIERRA DEVELOPMENT CO., et al., Counterdefendants.

          ORDER GRANTING COUNTERCLAIMANT CHARTWELL ADVISORY GROUP, LTD'S, MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST COUNTERCLAIM DEFENDANTS GOLDEN NUGGET, INC., GNLV CORP., GOLDEN NUGGET HOTELS AND CASINOS, AND PIONEER HOTEL, INC. [DKT. # 527]

          HON. ROGER T. BENITEZ UNITED STATES DISTRICT JUDGE.

         Now before the Court is Counterclaimant Chartwell Advisory Group, Ltd's, Motion for Partial Summary Judgment against Counterclaim Defendants Golden Nugget, Inc., GNLV Corp., Golden Nugget Hotels and Casinos, and Pioneer Hotel, Inc.

         Chartwell asserts three counterclaims against the Golden Nugget, Inc., GNLV Corp., Golden Nugget Hotels and Casinos, and Pioneer Hotel in its Third Amended Answer and Counterclaim.[1] As discussed in other orders of this Court, this case concerns taxes owed to the State of Nevada when a gaming casino or restaurant provides a meal to a patron or an employee on a complimentary basis.

         This motion concerns only tax refunds and credits for non-gaming complimentary meal use taxes (i.e., generally speaking, use taxes paid for complimentary meals given to the taxpayer's own employees or complimentary meals given to the taxpayer's customers in circumstances where the meals were not tied to amounts actually gambled). Unlike the use tax refund requests for gaming-related complimentary meals which were ultimately withdrawn as part of a settlement agreement with the State of Nevada, these Counterclaim Defendants actually received tax credits in amounts certain from the State of Nevada.

         Pioneer Hotel received a tax credit from the State of Nevada Department of Taxation in the amount of $296, 028. See Chartwell Mot., Ex. C(27). Brenda Canter, Rule 30(b)(6) witness for Pioneer Hotel testified that “We did get a credit . . . [o]f the 296, 028.” See Chartwell Mot., Ex. G, at p.139:5-7. Canter testified that Pioneer received notice of the credit in September 2013 and “started utilizing the credit in October.” Id. at p. 139:9-11. Canter testified that the tax credit has been exhausted. Id. at p. 139:14-15.

         GNLV Corporation received a tax credit from the State of Nevada Department of Taxation in the amount of $487, 705. See Chartwell Mot., Ex. C(29). Golden Nugget Laughlin received a tax credit from the State of Nevada Department of Taxation in the amount of $4, 900. See Chartwell Mot., Ex. C(30). Kenneth Kelly Roberts, Rule 30(b)(6) witness for Golden Nugget, Inc., GNLV Corp., and Golden Nugget Hotels and Casinos, testified that, in total, “We received $492, 605 as a tax credit.” See Chartwell Mot., Ex. E, at p. 144:16. Roberts testified that the tax credit was used for future sales tax payments. “It reduced the cash we had to pay for future sales tax, ” according to Roberts. Id. at p. 156:15-16.

         Against this backdrop, Chartwell moves for partial summary judgment. The Court finds there are no genuine issues of material fact as to the breach of contract claim for the actually-received non-gaming complimentary meal use tax credits and grants partial summary judgment in favor of Chartwell.

         I. LEGAL STANDARDS

         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The evidence of the non-movant is to be believed, and justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). However, the inferences that may be drawn are not limitless. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 632 (9th Cir. 1987). Inferences must be based on specific facts and only “‘rational' and ‘reasonable'” inferences may be drawn. Id.; United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989).

         A moving party bears the initial burden of showing there are no genuine issues of material fact. Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007) (citing T.W. Elec. Serv., Inc., 809 F.2d at 630). The moving party can do so by negating an essential element of the non-moving party's case, or by showing that the non-moving party failed to make a showing sufficient to establish an element essential to that party's case, and on which the party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986).

         “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248. As a general rule, the “mere existence of a scintilla of evidence” will be insufficient to raise a genuine issue of material fact; there must be evidence on which the jury could reasonably find for the non-moving party. Id. at 252. “Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive determination of every action.'” Celotex Corp., 477 U.S. 327 (quoting Fed.R.Civ.P. 1).

         II. CHOICE OF LAW - NEVADA STATE LAW

         To determine the applicable substantive law, a federal court sitting in diversity must apply the choice-of-law rules of the forum. Narayan v. EGL, Inc., 616 F.3d 895, 898 (9th Cir. 2010). As this Court has recently found and discussed in other orders, although the contracts between Chartwell and the Counterclaim defendants, Pioneer Hotel and the Golden Nugget parties, provide that the law of Pennsylvania is to be applied, Pennsylvania has no more than a modest relationship to the controversy. All of the substantial events took place in and with the State of Nevada. Therefore, the Court finds that Nevada state law applies.

         III. DISCUSSION - ...


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