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Desert Palace, Inc. v. Michael

United States District Court, D. Nevada

February 9, 2017

DESERT PALACE, INC., d/b/a CAESERS PALACE, a Nevada Corporation, Plaintiff,
v.
ANDREW P. MICHAEL,

          ORDER

          GEORGE FOLEY, JR. United States Magistrate Judge.

         This matter is before the Court on Plaintiff's Motion to Compel (ECF No. 44), filed on January 3, 2017. Instead of filing a response to Plaintiff's motion to compel, Defendant filed his Motion to Continue Filing Deadlines and Hearing Regarding Plaintiff's Motion to Compel (ECF No. 49) on January 8, 2017. Plaintiff filed its Opposition (ECF No. 53) on January 13, 2017 and Defendant filed his Reply (ECF No. 55) on January 18, 2017. The Court conducted a hearing in this matter on January 30, 2017.

         BACKGROUND AND DISCUSSION

         Plaintiff Desert Palace Inc., d/b/a Caesars Palace (“Caesars”) filed this action in the Nevada District Court, Clark County, Nevada on June 25, 2015. Defendant Andrew Michael (“Michael”) removed the action to federal court on March 3, 2016. Caesars alleges that Michael, a regular casino customer, executed credit applications seeking a credit line pursuant to which he would receive gaming chip advances up to a certain approved monetary limit. Complaint (ECF No. 1), ¶¶ 7, 8. The credit applications signed by Michael contained the following provisions: (a) “Before drawing on my line of credit, if granted, I agree to sign credit instruments (i.e., checks) in the amount of the draw;” (b) “I agree that each draw against my credit line is a separate advance of money by [Caesars];” (c) “If I receive an advance before I execute a credit instrument, I promptly will sign a credit instrument in the amount of the advance;” (d) “I am aware that this application is required to be prepared by the Nevada State Gaming Control Board regulations of the State of Nevada, and I may be subject to civil or criminal liability if any material information provided by me is willfully false;” (e) “I agree that this application and all credit issued pursuant thereto will be governed, construed and interpreted pursuant to the laws of the State of Nevada and venue shall lie solely in that state;” and (f) “I agree that [Caesars] may litigate any dispute involving the credit line, the debt or the payee in any court, state or federal, in Nevada. I submit to the jurisdiction of any court, state or federal, in the state of Nevada.” Complaint (ECF No. 1), ¶ 8.

         According to Caesars:

Although a credit instrument (also referred to as a “marker”) is generally signed contemporaneously when funds are advanced on credit to a casino patron, Nevada law and the regulations of the Nevada Gaming Commission promulgated thereunder also permit and authorize a licensee to advance funds on credit to a patron through the initial use of “lammers” a customary practice when a licensee allows a patron to “play on the rim” (also referred to as “rim play”). Rim play is generally a courtesy extended only to high level, ultra-VIP casino patrons.
During rim play, a licensee uses “lammers” or “rim cards” to track advances made to a patron during play, while the patron is in action, thereby allowing the patron to game without interrupting play to obtain executed markers.

Complaint (ECF No. 1), ¶¶ 15-16.

         Michael gambled at Caesars Palace on September 20-21, 2014, during which he received advances that exhausted his entire credit limit of $3 million. Id. at ¶¶ 19-21. After completing his play, Michael allegedly avoided Caesars' employees who attempted to have him execute a marker. Michael left Nevada and returned to London, England and has since refused to execute the marker. Id. at ¶¶ 22-40. Caesars alleges claims against Michael for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, fraud, specific performance, account stated, promissory/equitable estoppel, and declaratory relief. In his answer to the complaint, Michael denies that “Rim Debt” is valid or enforceable. Answer (ECF No. 5), ¶¶ 21-39. Michael also alleges that “[a]t the time of the alleged advances, [he] lacked the capacity to contract given Caesars consistent provision of alcohol throughout the period in question.” Id. at pg. 12, Affirmative Defense No. 23. Michael also asserts a counterclaim for $582, 800 that Caesars allegedly owes to him. Both parties have filed motions for summary judgment regarding the legal enforceability of Michael's $3 million gambling debt.

         In its motion to compel, Caesars states that it noticed Defendant Michael's deposition to be taken on December 13, 2016 at Plaintiff's counsel's law office in Las Vegas, Nevada. Caesars also noticed the depositions of non-parties Chris Michael, Elias Michael, Ian Simpkins and Kai Feller. These individuals allegedly accompanied Defendant Michael during his visit to Caesars in September 2014 and were present when he gambled on September 21-22, 2014. These witnesses apparently reside in England or Europe. Caesars seeks their depositions in regard to Michael's affirmative defense that Caesars plied him with alcohol such that he was not legally competent to request advances on his credit limit. Caesars served subpoenas for the non-party deponents on Michael's counsel who indicated that he was the contact person for these individuals. Neither Defendant Michael or the witnesses appeared for their scheduled depositions. Caesars is willing to take the witnesses' depositions by remote video conferencing so that they need not travel to the United States. Caesars, however, seeks an order compelling Defendant Michael to appear in Las Vegas for his deposition.

         Michael requests in his motion that Plaintiff's motion and its related briefing schedule, and the depositions be continued until the motions for summary judgment are decided “and the validity of this Court's jurisdiction over Plaintiff's action is determined.” Motion to Continue (ECF No. 49), pg 6. Defendant, in effect, moves for a stay of discovery pending a decision on the motions for summary judgment.

         DISCUSSION

         “The Federal Rules of Civil Procedure do not provide for automatic or blanket stays of discovery when a potentially dispositive motion is pending.” Kor Media Group, LLC v. Green, 294 F.R.D. 579, 581 (D.Nev. 2013) (quoting Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 601 (D.Nev. 2011). “Courts in this District have formulated three requirements in determining whether to stay discovery pending resolution of a potentially dispositive motion; motions to stay discovery may be granted when: (1) the pending motion is potentially dispositive; (2) the potentially dispositive motion can be decided without additional discovery; and (3) the Court has taken a ‘preliminary peek' at the merits of the potentially dispositive motion and is convinced that the plaintiff will be unable to state a claim for relief.” Id.; see also Jones v. Wirth, 2016 WL 4994962, *3 (D.Nev. Sept. 16, 2016). In this case, both parties have filed motions for summary judgment on the issue of whether Michael's $3 million gambling debt is legally enforceable under Nevada law. If Defendant Michael's motion is granted, it would be dispositive of the case. The issue can be decided without additional discovery.

         The Court has reviewed the parties' briefs on the summary judgment motions. Although Defendant Michael casts the issue as jurisdictional, it is not jurisdictional in the sense of whether the court has personal jurisdiction over the parties or whether the claims fall within federal subject matter jurisdiction. Instead, Defendant contends that the ...


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