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TDN Money Systems, Inc. v. Everi Payments, Inc.

United States District Court, D. Nevada

November 6, 2017



         Presently before the court are six motions in limine filed by plaintiff TDN Money Systems, Inc. (TDN). (ECF Nos. 88-93). Defendant Everi Payments, Inc., f/k/a Global Cash Access, [1] Inc. (Everi) responded. (ECF Nos. 106-11).

         Also before the court are five motions in limine filed by Everi. (ECF Nos. 94-98). TDN responded. (ECF Nos. 101-05).

         I. Facts

         This is a breach-of-contract dispute arising from a dealer-resale agreement. (ECF No. 17). TDN sells ticket-redemption kiosks on behalf of manufacturers and retailers. (ECF No. 17). Everi is a manufacturer of these kiosks. (ECF No. 17).

         TDN had a business relationship with Western Money Systems (WMS), a former Nevada business that manufactured and sold ticket-redemption kiosks. (ECF No. 17 at 3). On August 4, 2009, prior to this litigation, Everi acquired WMS. (ECF No. 17 at 3).

         WMS entered into a deal with TDN on January 1, 2006. (ECF No. 20). The deal appointed TDN as an authorized non-exclusive reseller of WMS products. (ECF No. 20). TDN's duties under the agreement were to make direct sales to end-users in its respective territory. (ECF No. 20). The agreement also allowed for WMS to retain its ability to sell directly to end-users. (ECF No. 20). However, sales made by WMS to end-users in TDN's territory entitle TDN to a commission provided that TDN provided the end-user with certain follow-up services. (ECF No. 20). The commission would be “equal to the difference between the net sale amount and the reseller price.” (ECF No. 20).

         On April 21, 2010, Everi and TDN entered into a new contract, containing the same terms as the previous contract. (ECF No. 17). On March 12, 2014, Everi sent a letter to TDN informing TDN of its intent not to renew the agreement for a subsequent term. (ECF No. 37 at 5). In response, on March 18, 2014, TDN sent a letter to Everi informing Everi of its intent to renew the agreement for another year. (ECF No. 37 at 5). The terms of the contract allowed for automatic renewal at the discretion of one party. (ECF No. 17). The contract stated that “if either party delivers notice of its desire to renew the Agreement to the other party no less than 30 days prior to the expiration of the current Term, the Agreement shall be automatically renewed for an additional year.” (ECF No. 17).

         On November 19, 2015, TDN filed the original complaint. (ECF No. 1). Later, on January 21, 2016, TDN filed an amended complaint alleging four causes of action: (1) intentional interference with contractual relations; (2) intentional interference with prospective economic advantage; (3) breach of contract; (4) breach of covenant of good faith and fair dealing; and (5) special damages. (ECF No. 17).

         On August 3, 2016, the court dismissed without prejudice TDN's claims for (1) intentional interference with contractual relations and (2) intentional interference with prospective economic advantage. (ECF No. 53).

         TDN moved for partial summary judgment, seeking a holding that § 16 of the parties' agreement allows one party to renew the agreement for an additional term over the other party's objection. (ECF No. 33). On January 3, 2017, the court granted TDN's motion, holding the following:

[T]he contract clearly states that if either party gives notice of its desire to renew the agreement 30 days prior to the expiration of the current term, the agreement will automatically renew for an additional term. . . . Therefore, the plain language of the contract states that the agreement is effectively perpetual.

(ECF No. 70 at 6) (citing ECF No. 53 at 4).

         Everi argued in opposition to summary judgment that in any event, TDN waived its right to unilaterally renew the agreement, arguing that “TDN's failure to send written notice in any year before 2014 means it forever lost any purported right . . . to ‘unilaterally renew' the 2010 [a]greement over [Everi]'s termination.” (ECF No. 37 at 12). This court disagreed, holding that defendant failed to point to any term in the agreement or any evidence in support of its contention that failure to provide notice of intent to renew terminates the parties' ability to unilaterally renew the agreement under § 16. (ECF No. 70 at 6). The court held that “§ 16 of the agreement allows one party to renew the agreement, ” and granted partial summary judgment for TDN. Id. at 6-7.

         Now, the parties have filed several motions in limine to exclude certain evidence.

         II. Legal Standard

         “The court must decide any preliminary question about whether . . . evidence is admissible.” Fed.R.Evid. 104. Motions in limine are procedural mechanisms by which the court can make evidentiary rulings in advance of trial, often to preclude the use of unfairly prejudicial evidence. United States v. Heller, 551 F.3d 1108, 1111-12 (9th Cir. 2009); Brodit v. Cambra, 350 F.3d 985, 1004-05 (9th Cir. 2003).

         “Although the Federal Rules of Evidence do not explicitly authorize in limine rulings, the practice has developed pursuant to the district court's inherent authority to manage the course of trials.” Luce v. United States, 469 U.S. 38, 41 n.4 (1980). Motions in limine may be used to exclude or admit evidence in advance of trial. See Fed. R. Evid. 103; United States v. Williams, 939 F.2d 721, 723 (9th Cir. 1991) (affirming district court's ruling in limine that prosecution could admit impeachment evidence under Federal Rule of Evidence 609).

         Judges have broad discretion when ruling on motions in limine. See Jenkins v. Chrysler Motors Corp., 316 F.3d 663, 664 (7th Cir. 2002); see also Trevino v. Gates, 99 F.3d 911, 922 (9th Cir. 1999) (“The district court has considerable latitude in performing a Rule 403 balancing test and we will uphold its decision absent clear abuse of discretion.”). “[I]n limine rulings are not binding on the trial judge [who] may always change his mind during the course of a trial.” Ohler v. United States, 529 U.S. 753, 758 n.3 (2000); accord Luce, 469 U.S. at 41 (noting that in limine rulings are always subject to change, especially if the evidence unfolds in an unanticipated manner).

         “Denial of a motion in limine does not necessarily mean that all evidence contemplated by the motion will be admitted at trial. Denial merely means that without the context of trial, the court is unable to determine whether the evidence in question should be excluded.” Conboy v. Wynn Las Vegas, LLC, No. 2:11-cv-1649-JCM-CWH, 2013 WL 1701069, at *1 (D. Nev. Apr. 18, 2013).

         III. Discussion

         a. TDN's motion in limine 1

         TDN's motion in limine 1 seeks to preclude evidence contradicting the court's summary judgment order on the meaning of § 16 of the parties' agreement. (ECF No. 88). Everi responded. (ECF No. 106). TDN replied. (ECF No. 113). This motion is granted in part to the following extent: evidence offered for the purpose of contradicting a prior holding of this court-i.e. for the purpose of showing that this court's ruling on partial summary judgment was wrong-is not admissible because it is not relevant to the issues that remain outstanding for trial. Fed.R.Evid. 402. Further, such evidence is not probative and risks misleading the jury and confusing the issues. Fed.R.Evid. 403. Specifically, this means that Everi is not permitted to offer parol evidence for the purpose of showing that Everi's interpretation of § 16 of the contract is correct (see, e.g., ECF No. 106 at 2 ln. 20-23) and this court's order on summary judgment is incorrect. The issue of the meaning of this provision of the contract has been conclusively decided by this court and is not an open question for trial.

         However, this court will not preclude evidence offered for another, legitimate purpose just because it may have a tendency to contradict the court's prior ruling-such an order would be too broad and unnecessary. This court will remedy any potential prejudice from the admission of such evidence through jury instructions.

         Finally, neither party's counsel is permitted to argue to the jury that § 16 of the contract means something other than what this court's order on partial summary judgment determined. (See ECF No. 70). Everi had the opportunity to dispute this interpretation of the contract during the motion for summary judgment proceedings, and failed to make a convincing case at that time. Therefore, the court foreclosed the issue from trial. Therefore, this motion is granted, in part, in accordance with the foregoing.

         b. TDN's motion in limine 2

         TDN's motion in limine 2 seeks to preclude evidence that TDN did not send renewal notices in 2011, 2012, and 2013. (ECF No. 89). Everi responded. (ECF No. 107). This court has already ruled that Everi's argument for summary judgment-that TDN waived its right to renew the contract by failing to send a letter of removal in prior years-is unpersuasive and unsupported. (ECF No. 70 at 6). Everi has not pointed this court to any provision of the contract or any evidence that shows that the failure to provide notice of intent to renew one year would terminate the contract and a party's rights under § 16 in a later year. Id.

         That said, this is not the question for trial: the question of whether TDN's purported 2014 renewal of the contract under § 16 was effectual depends on whether § 16 was still in effect at the time TDN attempted to execute it. There are many ways parties might renew a contract, and here, exercising § 16 of the contract is one of them. Whether the parties had somehow agreed, explicitly or implicitly, to continue operating under the contract through March of 2014 determines whether TDN had the right under § 16 to unilaterally extend the contract for an additional year thereafter.

         Therefore, evidence of whether the contract was still in effect at the time that TDN purported to unilaterally renew it will be admissible. This includes the evidence that TDN did not send renewal letters under § 16 in 2011, 2012, and 2013 because-though not dispositive alone, as there might be other ways that the parties agreed to renew the contract-this fact would tend to eliminate one possible basis for claiming that it was still in effect. Thus, at this stage in the proceedings, this evidence appears relevant to a material issue. Fed.R.Evid. 401. TDN's motion in limine 2 is denied. . . . . . . . . .

         c. TDN's motion in limine 3

         TDN's motion in limine 3 seeks to preclude parol evidence that the contract allowed Everi to compete with TDN. (ECF No. 90). Everi responded. (ECF No. 108). TDN replied. (ECF No. 113).

         In a nutshell, TDN argues that Everi's witnesses cannot testify regarding the meaning of the contract because they were not witnesses to the writing and formation of the original written agreement. This is not a valid basis, in itself, to deem their testimony inadmissible.

         First, even if these witnesses did not observe or participate in the formation of the original written contract, they may have been present and have first-hand knowledge of the intent of the parties at the time of one of the several renewals of the contract. If any of the renewals of the contract occurred as the result of a mutual agreement between the parties (as opposed to a unilateral renewal under § 16), then the mutual understanding of the parties at the time of the renewal would govern the meaning of the new, updated contract.

         Second, under the circumstances in which a court may consider parol evidence, evidence by witnesses present at the time of contract formation is not the only form of parol evidence a court may consider: “[B]oth integrated and unintegrated agreements are to be read in the light of the circumstances and may be explained or supplemented by operative usages of trade, by the course of dealing between the parties, and by the course of performance of the agreement.” Restatement (Second) of Contracts § 209 cmt. a. (1981). TDN has not argued that the court cannot consider parol evidence here; indeed, TDN seeks to present parol evidence of the intent of the parties. (See ECF No. 108 at 1). To the extent that Everi's witnesses will testify to a valid form of parol evidence, such as the course of dealings of the parties after entering the contract, the evidence is relevant and thus admissible. Accordingly, TDN's motion in limine 3 is denied.

         d. TDN's motion in limine 4

         TDN's motion in limine 4 seeks to preclude defendant's rebuttal expert from offering an alternative calculation of damages because the expert's initial report does not provide any such alternative calculation. (ECF No. 91). Everi responded. (ECF No. 109).

         TDN argues that Everi's rebuttal expert intends to testify to a specific alternative damages calculation (one substantially less than TDN's damages calculation) that did not appear in the rebuttal expert's original report, but only in a later supplemental report. The original rebuttal report contained only critiques of TDN's expert report. Everi counters that the supplemental calculation of damages provided by its rebuttal expert was necessitated by late-filed supplemental reports by TDN's expert. Everi asks the court to refrain from entering any pretrial order that limits the scope of its rebuttal expert's testimony.

         A party seeking to introduce expert testimony at trial must disclose to the opposing party a written report that includes “a complete statement of all opinions the witness will express and the basis and reasons for them.” Fed.R.Civ.P. 26(a)(2)(B). Failure to comply with that rule may preclude the party from, “us[ing] that witness or relevant expert information to supply evidence on a motion, at a hearing, or at trial, unless the failure was substantially justified or is ...

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