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Full Opinion
134 Nev., Advance Opinion 51
IN THE SUPREME COURT OF THE STATE OF NEVADA
MARIO LABARBERA, AN No. 71276
INDIVIDUAL,
Appellant,
vs. AI lED
WYNN LAS VEGAS, LLC, D/B/A WYNN
LAS VEGAS, A NEVADA LIMITED JUL 1 9 2018
LIABILITY COMPANY, ELL: BROWN
CLE5
Respondents. BY
Appeal from a final judgment in a breach of contract action.
Eighth Judicial District Court, Clark County; Ronald J. Israel, Judge.
Reversed and remanded with instructions.
Jeffrey R. Albregts, LLC, and Jeffrey R. Albregts, Las Vegas,
for Appellant.
Semenza Kircher Rickard and Lawrence J. Semenza, III, Christopher D.
Kircher, and Jarrod L. Rickard, Las Vegas,
for Respondent.
BEFORE DOUGLAS, C.J., PICKERING and HARDESTY, JJ.
OPINION
By the Court, HARDESTY, J.:
Respondent Wynn Las Vegas, LLC, filed a breach• of contract
action to collect $1,000,000 in unpaid casino markers from appellant Mario
LaBarbera. In this appeal, we must determine whether the district court
erred when it precluded LaBarbera from testifying at trial by video
conference from Italy and excluded evidence of his intoxication.
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We conclude that the district court abused its discretion under
the Nevada Supreme Court Rules Part IX-B(B) when its written order
summarily denied LaBarbera's request to testify at trial using audiovisual
equipment. While recognizing the very high burden required for a
voluntary intoxication defense in a contract action, we also conclude that
the district court abused its discretion when it applied an incorrect standard
to exclude any evidence of intoxication. We reverse the judgment and
remand for a new trial
FACTS AND PROCEDURAL HISTORY
LaBarbera is an Italian citizen and business owner who serves
as a consultant for the pharmaceutical industry. He claims to suffer from
gambling addiction, as certified in Italy, and does not speak any English.
LaBarbera visited Las Vegas in late March through early April of 2008 after
being recruited by Alex Pariente, an Italian-speaking former employee and
VIP host of Wynn. While staying at the Wynn, LaBarbera gambled and lost
$1,000,000 of his own money. Wynn then extended $1,070,000 worth of
gaming credit in the form of casino markers to LaBarbera, $1,000,000 of
which was left unpaid. LaBarbera claims he was intoxicated at the time he
signed the casino markers and that the signatures on the markers are not
his.
Shortly after LaBarbera left Las Vegas, Wynn filed a complaint
with the Clark County District Attorney's Office for passing bad checks in
violation of NRS 205.130, 1 resulting in a bench warrant being issued for
LaBarbera's arrest. Wynn also filed a breach of contract suit against
1 NRS 205.130 was amended in 2011 and now states that an
instrument's amount must be greater than $650, not $250. 2011 Nev. Stat.,
ch. 41, § 11, at 162-63. This change in law is irrelevant to our rulings here.
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LaBarbera. Before the jury trial, Wynn filed three motions in limine
seeking to exclude evidence or argument of LaBarbera's gambling addiction,
intoxication, and any alleged forgery. The district court granted the first
two motions, prohibiting LaBarbera from arguing about his gambling
addiction or intoxication at trial, but denied the third motion, allowing
LaBarbera to argue that the casino markers were invalid forgeries. Because
LaBarbera's outstanding bench warrant would cause him to be arrested if
he came to Clark County to testify, he moved for permission to testify at
trial from Italy via video conference and an interpreter. The district court
denied LaBarbera's motion and the trial proceeded without his presence.
The jury returned a verdict in favor of Wynn in the principal
amount of $1,000,000. Thereafter, the district court entered a final
judgment awarding Wynn contract interest at a rate of 18 percent per
annum, attorney fees, costs, and prejudgment interest, totaling
$2,626,075.81. This appeal followed.
DISCUSSION
LaBarbera seeks reversal of the judgment, arguing, among
other things, that the district court abused its discretion when it refused to
let him testify by audiovisual communication and excluded evidence of his
intoxication. 2
2LaBarbera also argues that Wynn's claims should have been barred
by the doctrines of unclean hands and laches, that the casino markers were
improperly classified under the bad check statute, and that the district
court abused its discretion by excluding evidence of his bench warrant and
allowing Wynn to call untimely disclosed witnesses. We conclude that these
arguments lack merit. LaBarbera also claims that the district court erred
when it excluded evidence of his gambling addiction, but we conclude this
claim lacks merit under NRS 463.368(6) (stating that a patron's claim of
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The district court abused its discretion by denying LaBarbera's motion to
testify via video conference and an interpreter
LaBarbera argues that the district court abused its discretion
when it denied his motion to testify from Italy via video conference with an
interpreter. Specifically, LaBarbera points to NRCP 43(a), which states
that "Mlle court may, for good cause shown in compelling circumstances
and upon appropriate safeguards, permit presentation of testimony in open
court by contemporaneous transmission from a different location."
LaBarbera contends that he made a sufficiently compelling showing of
special circumstances, and it was an abuse of discretion for the district court
to refuse to accommodate him. Citing Barry v. Lindner, 119 Nev. 661, 668,
81 P.3d 537, 542 (2003), Wynn argues that telephonic or video conference
testimony is not permissible at trial absent a showing of special
circumstances. Wynn contends that LaBarbera failed to demonstrate such
a showing or how he would preserve appropriate safeguards.
Neither LaBarbera, Wynn, nor the district court reference Part
IX-B(B) of the Nevada Supreme Court Rules, which addresses this issue.
Part IX-B(B), Rule 2 states that "[t]o improve access to the courts and
reduce litigation costs, courts shall permit parties, to the extent feasible, to
having a gambling disorder is not a defense in an action to enforce a
gambling debt). Further, LaBarbera argues that the district court abused
its discretion when it gave jury instruction number 36, which read:
"[s]imilarly, whether a person cannot read, write, speak or understand the
English language is also immaterial to whether an agreement written in
English is enforceable. Prior to signing a contract, a person has the duty to
learn the terms of the contract." However, because LaBarbera did not object
to the inclusion of this instruction at trial, his argument is waived. See J.A.
Jones Constr. Co. v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 285, 89 P.3d
1009, 1015 (2004) ("No party may assign as error the giving or the failure
to give an instruction unless he objects . . . ." (quoting NRCP 51(c))).
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appear by simultaneous audiovisual transmission equipment at
appropriate proceedings pursuant to these rules." We note that the
rule includes the word "shall," and "[fin these rules . `[siliall' is
mandatory." SCR Part IX-B(B)(1)(5). "Appropriate proceedings" include
"[t]rials . provided there is good cause as determined by the court in
accordance with Rule 1(6)." SCR Part IX-B(B)(4)(1)(a). "Good cause' may
consist of one or more of the following factors as determined by the
court: . . . kflhether any undue surprise or prejudice would
result; . . . convenience of the parties, counsel, and the court; . . . cost and
time savings." SCR Part IX-B(B)(1)(6)(b)-(d). The Barry case cited by Wynn
predates Part 1X-B(B) of the Nevada Supreme Court Rules—which became
effective on July 1, 2013—by ten years and thus does not control here. See
generally SCR Part IX-B(B); Barry, 119 Nev. at 661, 81 P.3d at 537.
We conclude that the district court abused its discretion in
denying LaBarbera's request to testify via video conference. The Nevada
Supreme Court Rules favor accommodation of audiovisual testimony upon
a showing of good cause. LaBarbera demonstrated in his motion that good
cause existed since he showed convenience and cost and time savings, and
he otherwise would be unable to testify at all. Additionally, Wynn's
arguments fail to establish how LaBarbera's testimony by video conference
would have caused any undue surprise or prejudice. During discovery,
Wynn took LaBarbera's deposition in Italy and some of the deposition
testimony was used at trial. Moreover, the district court summarily denied
LaBarbera's motion without explanation. We conclude that the district
court abused its discretion and violated the policy promoted by NRCP 43(a)
and SCR Part IX-B(B), Rule 2. Additionally, we perceive this error to be
prejudicial because LaBarbera's absence conveyed to the jury a lack of
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149
interest in the case and prevented him from responding to other testimony
presented at trial.
The district court abused its discretion by excluding evidence of LaBarbera's
intoxication
LaBarbera argues that a lack of capacity due to excessive
intoxication is a valid defense to a contract claim and the district court
abused its discretion when it excluded evidence of his intoxication at the
time he signed the casino markers. In his deposition, LaBarbera claimed
that Wynn continually brought drinks he did not order, that he was
especially intoxicated while gambling, and that on one occasion he became
intoxicated to the point where he became physically ill and vomited. Wynn
argues that LaBarbera never complained or brought attention to his
intoxication while he executed multiple gaming markers over several days.
Wynn cites to cases showing the extremely high burden required to prove a
voluntary intoxication defense and claims that LaBarbera's argument fails
because he cannot identify any specific facts about how much or how long
he drank.
In the context of capacity to contract, this court has held that
intoxication may render a person incompetent where "actual intoxication
dethroned his reason, or that his understanding was so impaired as to
render him mentally unsound when the act was performed." Seeley v.
Goodwin, 39 Nev. 315, 324-25, 156 P. 934, 937 (1916) (internal quotation
marks omitted). According to the Restatement,
[a] person incurs only voidable contractual duties
by entering into a transaction if the other party has
reason to know that by reason of intoxication
(a) he is unable to understand in a reasonable
manner the nature and consequences of the
transaction, or
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(b) he is unable to act in a reasonable manner
in relation to the transaction.
Restatement (Second) of Contracts § 16 (Am. Law Inst. 1981). In addition,
in dicta, Seeley recognizes a duty on the part of an intoxicated person to
promptly disaffirm the contract. See Seeley, 39 Nev. at 323, 156 P. at 936;
see also Restatement (Second) of Contracts § 16 cmt. c ("On becoming sober,
the intoxicated person must act promptly to disaffirm [the contract] ."). The
rule in the Restatement is an extension of what this court previously held
in Seeley, and we adopt it as the appropriate standard for an intoxication
defense in a contract action.
In proving intoxication, or a subsequent ratification, the burden
of proof is usually the higher standard of clear and convincing evidence.
In an action on a contract, a party must present
convincing proof of claims that due to intoxication
at the time of making a contract, the party was
bereft of mental faculties. When a party to a
contract was lacking in mental capacity at the time
of execution by reason of drunkenness, proof of a
subsequent ratification must be clear and
convincing.
17B C.J.S. Contracts § 988 (2018) (footnote omitted). Although some courts
have applied a preponderance of the evidence standard, see Ewert v.
Chirpich, 211 N.W. 306, 307 (Minn. 1926), most courts that have reviewed
this issue have applied the clear and convincing evidence standard, see In
re Wills, 126 B.R. 489, 497 (Bankr. E.D. Va. 1991); Van Meter v. Zumwalt,
206 P. 507, 508-09 (Idaho 1922); Coppolina v. Radice, 164 N.E. 643, 644
(Ohio Ct. App, 1928); In re Amending & Revising Okla. Unif. Jury
Instructions—Civil, 217 P.3d 620, 625 (Okla. 2009). We adopt the clear and
convincing standard. On remand, the district court should instruct the jury
on both the correct rule of law and burden of proof.
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When the district court granted Wynn's motion in limine to
exclude evidence of intoxication, it relied on FGA, Inc. v. Giglio, 128 Nev.
271, 278 P.3d 490 (2012). The district court stated:
In [Giglio], there was evidence of drinking, but they
precluded anybody from talking about that because
there's nobody to testify regarding the fact that the
individual was—had drank so much that they were,
in fact, intoxicated.
The district court further stated, "I think that the case law and the statutes
are clearly—you know, voluntary intoxication is not a defense. If it was,
half the people in the casino could ask for their money back because they
would say: Hey, they gave me a free drink, I kept drinking."
Giglio was a tort case in which this court affirmed the district
court's decision to exclude evidence of the plaintiffs alcohol consumption
because there was insufficient evidence that she was intoxicated or that the
intoxication caused the injury. 128 Nev. at 285-86, 278 P.3d at 499. Giglio
did not involve a contract dispute nor hold that intoxication was not a valid
contract defense. Id. at 275-76, 278 P.3d at 493. We conclude that Giglio
does not provide the district court with an adequate basis for excluding
LaBarbera's intoxication evidence, as it is too factually dissimilar and does
not provide the applicable rule of law. Here, LaBarbera, as the defendant,
was trying to use evidence of his own intoxication to show lack of capacity
in a contract dispute.
Wynn does not argue that the district court's legal analysis was
correct Instead, the essence of Wynn's argument is that the voluntary
intoxication defense is disfavored and the standard of proof is very high.
Wynn also argues that even if LaBarbera was legally incapacitated, he was
required to disavow the contract after regaining capacity. See Hernandez
v. Banks, 65 A.3d 59, 67 (D.C. 2013) ("The power of avoidance also
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terminates if the incapacitated party, upon regaining capacity, affirms or
ratifies the contract."). Wynn's arguments tend to show that LaBarbera
may have difficulty proving his voluntary intoxication defense at trial, but
those arguments do not justify the district court's decision to bar LaBarbera
from making his argument altogether.
We conclude that the district court abused its discretion in
excluding the intoxication evidence because its ruling was erroneous under
Seeley and misinterpreted the holding in Giglio. See Staccato v. Valley
Hosp., 123 Nev. 526, 530, 170 P.3d 503, 506(2007) (stating that "the district
court abuses its discretion if it applies an incorrect legal standard"). On
remand, we instruct the district court to apply the correct standard, set
forth in the Restatement, to determine the admissibility of LaBarbera's
intoxication evidence.
CONCLUSION
The district court abused its discretion by denying LaBarbera's
request to appear via video conference in violation of SCR Part IX-B(B),
which states that courts shall, "to the extent feasible," permit parties to
appear via simultaneous audiovisual transmission at trial where good cause
is shown. We further hold that the district court abused its discretion by
excluding evidence of LaBarbera's intoxication when it improperly relied on
FGA, Inc. v. Giglio, 128 Nev. 271, 278 P.3d 490 (2012).
Accordingly, we reverse the district court's judgment and
remand with instructions for the district court to conduct a new trial on all
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issues, consistent with this opinion. Additionally, we reverse the district
court's award of contract interest, attorney fees, costs, and prejudgment
interest.
Liczyck \
Hardesty
We concur:
CA.
geks4
Pickering
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