Plaintiff\Counterdefendant,
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`Case No. 2:20-cv-001552-KJD-NJK
`
`ORDER
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`BALUMA, S.A., d/b/a ENJOY PUNTA DEL
`ESTE & CASINO,
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`v.
`
`VLADISLOV DAVYDOV,
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`Defendant\Counterclaimant.
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 1 of 11
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEVADA
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`Presently before the Court is Plaintiff’s Motion for Summary Judgment (#24). Defendant
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`filed a response in opposition (#26) to which Plaintiff replied (#27).
`I. Background
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`Plaintiff, a gaming corporation in Uruguay associated with Caesars Entertainment, brings
`this action to recover for breach of contract based on gaming markers signed by Defendant. On
`or about November 15, 2018, Defendant Davydov submitted a credit application (the “Credit
`Application”) to Plaintiff Baluma seeking to obtain credit from Baluma. In connection with the
`Credit Application, Davydov completed a separate document entitled “Casino Credit Fact Sheet,
`Application and Agreement” (the “Fact Sheet”) which set forth certain terms and conditions
`associated with the line of credit sought by Davydov. As a result, Davydov was granted marker
`signing privileges. Davydov, on a later visit, drew down the full amount of his line of credit,
`$100,000.00. In connection with his request, Davydov admits that he executed an agreement
`known as the Draw Request, dated January 21, 2020. The Draw Request contained Defendant’s
`promise to repay $100,000.00 acknowledging that the document was a credit instrument that
`created an obligation to pay the full amount, “identical to a personal check[.]” See Plaintiff’s
`Motion for Summary Judgment (“MSJ”), Doc. No. 24, p. 4, l. 1-15.
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 2 of 11
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`After agreeing to the terms of the Draw Request, Davydov signed four (4) separate
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`markers reflecting the total principal amount of indebtedness of $100,000 (the “Markers”).
`Baluma has demonstrated, and Davydov has admitted (through his unwithdrawn Admissions),
`that the Markers expressly contemplated that Davydov would pay the amount reflected therein,
`plus interest, on or before the dates set forth in each Marker. Baluma has established, and
`Davydov has admitted, that he accepted $100,000 from the Casino and utilized the same
`gambling in the Casino.
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`Despite Davydov’s express obligation to repay the entire amount due under the Markers,
`Davydov has admitted that he did not repay the amounts reflected by the Markers prior to
`leaving the Casino or by the dates contemplated by the Markers. See MSJ, Ex. 2, Resp. to
`Admissions, Req. No. 18; Ex. 5, Davydov Dep. Tr., 29:17-23; Comp., ECF No. 1, ¶¶ 18-19;
`Ans., ECF No. 19, ¶ 18-19 (stating, in relevant part, “Defendant admits he did not personally
`repay the markers[.]”), ¶ 23 (stating, in relevant part, “Defendant admits he did not personally
`subsequently repay the markers[.]”
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`Plaintiff then filed the present action asserting claims for breach of contract, breach of the
`covenant of good faith and fair dealing and unjust enrichment.1 Defendant filed a counterclaim
`asserting claims for setoff, recoupment and breach of contract.
`II. Standard
`
`Summary judgment is appropriate when the pleadings, discovery responses, and
`affidavits “show there is no genuine issue as to any material fact and that the movant is entitled
`to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986) (citing Fed.
`R. Civ. P. 56(c)). For summary judgment purposes, the court views all facts and draws all
`inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach
`& Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).
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`The moving party bears the initial burden of showing that there are no genuine issues of
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`1 The Court, finding that no genuine issue of material fact prevents it from granting Plaintiff’s motion for
`summary judgment on breach of contract, dismisses Plaintiff’s claim for unjust enrichment as moot. The general rule
`being that unjust enrichment claims may not be based on express written contracts. Leasepartners Corp v. Robert L.
`Brooks Trust, 942 P.2d 182, 187 (Nev. 1997).
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 3 of 11
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`material fact for trial. It can do this by: (1) presenting evidence to negate an essential element of
`the nonmoving party's case; or (2) demonstrating the nonmoving party failed to make a showing
`sufficient to establish an element essential to that party's case on which that party will bear the
`burden of proof at trial. See Celotex, 477 U.S. at 323–325.
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`If the moving party satisfies its initial burden, the burden shifts to the opposing party to
`establish that a genuine dispute exists as to a material fact. See Matsushita Elec. Indus. Co. v.
`Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a genuine dispute of
`material fact, it is sufficient that “the claimed factual dispute be shown to require a jury or judge
`to resolve the parties' differing versions of the truth at trial.” T. W. Elec. Serv., Inc. v. Pac. Elec.
`Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (quotation marks and citation omitted). But
`the nonmoving party “must do more than simply show that there is some metaphysical doubt as
`to the material facts.” Bank of Am. v. Orr, 285 F.3d 764, 783 (9th Cir. 2002) (internal citations
`omitted). It “must produce specific evidence, through affidavits or admissible discovery material,
`to show” a sufficient evidentiary basis on which a reasonable fact finder could find in its favor.
`Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991); Anderson v. Liberty Lobby,
`Inc., 477 U.S. 242, 248–249 (1986).
`III. Plaintiff’s Motion for Summary Judgment on Its Claims
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`A. Breach of Contract
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`To prevail on its breach of contract claim against Davydov, Baluma must prove: “(1)
`formation of a valid contract; (2) performance or excuse of performance by the plaintiff; (3)
`material breach by the defendant; and (4) damages.” See Laguerre v. Nevada Sys. of Higher
`Educ., 837 F. Supp. 2d 1176, 1180 (D. Nev. 2011). After establishing the required elements,
`summary judgment is appropriate in a marker collection case such as this. See NRS 463.368(1)
`et seq.; see also Morales v. Aria Resort & Casino, LLC, 995 F. Supp. 2d 1176, 1180-1181 (D.
`Nev. 2014) (finding credit applications and markers are contracts, under which the signing party
`has a duty to pay.); see also Desert Palace, Inc. v. Michael, No. 2:16-cv-0462-JAD-GWF, 2017
`U.S. Dist. LEXIS 19202, at *8 (D. Nev. Feb. 9, 2017) (finding the casino could bring a civil
`action against the patron to recover the amount of the debt without presenting the markers to the
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 4 of 11
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`designated banks for payment).
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`Here, there is no genuine issue that must be resolved by a fact finder. It is undisputed that
`Davydov entered into a series of valid and existing contracts for a loan in the amount of
`$100,000—namely, the Credit Application, the Fact Sheet, Draw Request, and Markers
`(collectively, the “Contract”).
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`There is no dispute as to repayment obligations under the Contract as reflected by its
`plain language. May v. Anderson, 672 P.3d 1254, 1257 (Nev. 2005) (under Nevada law, “Basic
`principles require, for an enforceable contract, an offer and acceptance, meeting of the minds,
`and consideration”). Davydov confirmed that he executed each of those documents with the
`intent of receiving a $100,000 line of credit with which to gamble at Baluma’s casino,
`confirming that there was an acceptance and meeting of the minds with respect to parties’
`Contract. Ex. 2, Resp. to Admissions, No. 15; see also Ans., ECF No. 19, ¶ 16 (admitting that he
`signed the Markers and stating “the terms of the [Markers] speak for themselves”), Davydov
`further confirmed the parties’ meeting of the minds during his deposition when he admitted that
`he filled out the forms for the purpose of obtaining credit in the amount of $100.000.00.
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`Under the terms of the Contract, Baluma was obligated to provide Davydov with
`$100,000 for his use within the Casino in exchange for Davydov’s promise to repay the funds
`loaned to him. There is no dispute that the Casino fulfilled all obligations under the agreement
`and provided Davydov with $100,000 which he then gambled in the Casino, which Davydov
`admitted in his deposition.
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`It is also undisputed that Davydov breached the Contract. That is, under the terms of the
`Credit Application, Fact Sheet, Draw Request and Markers, Davydov was contractually
`obligated to repay the amounts loaned thereunder no later than the date set forth in each Marker.
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`Davydov executed the following Markers:
`(1) Davydov executed Marker number MK10312471 in the amount of $30,000.00 to be
`paid in full, plus interest, on or before April 21, 2020.
`(2) Davydov executed Marker number MK10312677 in the amount of $20,000.00 to be
`paid in full, plus interest, on or before April 22, 2020.
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`(3) Davydov executed Marker number MK10312693 in the amount of $10,000.00 to be
`paid in full, plus interest, on or before April 22, 2020.
`(4) Davydov executed Marker number MK10312698 in the amount of $40,000.00 to be
`paid in full, plus interest, on or before April 22, 2020.
`See Ans, ECF No. 19, ¶¶ 11-15 (admitting he signed the agreements at issue); MSJ, Ex. 2, Resp.
`to Admissions, Req. Nos. 10-14; Ex. 5, Davydov Dep. Tr., 40:2-15; Ex. 6, Bayeto Decl., ¶¶ 7-10.
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`It is also undisputed that Davydov did not repay the $100,000 he received from Baluma,
`i.e., that he breached the terms of the Contract. Ans, ECF No. 19, ¶ 18 (“Defendant admits he did
`not personally repay the markers[.]”), ¶ 19 (“Defendant admits he did not personally
`subsequently repay the markers[.]”); MSJ Ex. 2, Resp. to Admissions, Req. No. 18 (“Admit that
`I have not repaid any amount under the Casino Markers, but deny that the funds as contained in
`the Casino Markers were a loan to me.”); Ex. 5, Davydov Dep. Tr., 29:17-25; Ex. 6, Bayeto
`Decl., ¶¶ 14-15.
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`Finally, there is no dispute that Plaintiff performed under the terms of the Contract by
`providing Davydov $100,000 to gamble in the Casino under his line of credit. After Plaintiff’s
`performance, the terms of the Contract dictate that Davydov is contractually obligated to repay
`the principal amount reflected in the Markers plus interest. Davydov has admittedly not repaid
`any of the money loaned to him under the Markers. Therefore, Baluma has been directly
`damaged in the amount of $100,000 plus interest and attorneys’ fees.
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`Given that Plaintiff has set forth uncontroverted evidence to establish that: (a) there exists
`a valid and existing contract between Baluma and Davydov; (b) Baluma performed all material
`terms of the agreement; (c) Davydov breached the agreement by failing and/or refusing to repay
`the amounts owed; and (d) Baluma has been directly damaged as a result of Davydov’s breach,
`the Court grants summary judgment in Plaintiff’s favor on its first claim for breach of contract.
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`B. Breach of the Covenant of Good Faith and Fair Dealing
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`To establish a claim for breach of the implied covenant of good faith and fair dealing, a
`party must show: (1) plaintiff and defendant were parties to a contract; (2) defendant owed a duty
`of good faith to plaintiff; (3) defendant breached that duty by performing in a manner that was
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`unfair or unfaithful to the purpose of the contract; and (4) plaintiff’s justified expectations were
`denied. Hilton Hotels Corp. v. Butch Lewis Prods., Inc., 808 P.2d 919, 922 (Nev. 1991). Where a
`party to a contract acts deliberately to contravene the intention and spirit of the contract, that
`party may be found liable for breach of the implied covenant of good faith and fair dealing. Id. at
`923.
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`Here, Davydov entered into a Contract with Baluma executing the Markers knowing that
`the intent of the documents constituting the Contract was the provision of money to Davydov for
`him to gamble, which amounts were to be repaid to the Casino. Despite his knowledge that all
`amounts provided to him under the Markers were to be repaid, Davydov left the Casino without
`repaying the same and further allowed the deadline for repayment set forth therein to lapse
`without even attempting to make a payment—a fact readily admitted by Davydov.
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`Thus, as admitted through his own testimony, pleadings, and discovery responses,
`Davydov acted in a manner intended to contravene the spirit of the agreement between the
`parties—namely that he accepted funds under the Markers and failed to repay the same in
`accordance with the terms of the Markers.2 Therefore, the Court grants summary in Plaintiff’s
`favor on its second cause of action for breach of the covenant of good faith and fair dealing.3
`IV. Plaintiff’s Motion for Summary Judgment on Defendant’s Affirmative Defenses and
`Counterclaims
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`All of Defendant\Counterclaimant’s affirmative defenses and claims for relief arise
`exclusively out of an “Independent Agent Agreement” to which Davydov is not a party.
`Davydov alleges that Johnny Chun-Yu Chow entered into this agreement with Baluma under
`which Chow would be paid commissions based on money spent in the casino by players (such as
`Davydov) that Chow brought to the Casino. However, Davydov first disclosed this contract on
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`2 To the extent that Defendant argues that his testimony and affidavit raise genuine issues of material fact,
`the Court disagrees. “[A] party cannot create an issue of fact by an affidavit contradicting his prior deposition
`testimony.” Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266 (9th Cir. 1991). Likewise, “[a] party cannot create a
`genuine issue of material fact to survive summary judgment by contradicting his earlier version of the facts.” Block
`v. City of Los Angeles, 253 F.3d 410, 419 n. 2 (9th Cir. 2001) (rejecting a declaration that contradicted stipulated
`facts). Here, Defendant’s formal Admissions have never been withdrawn.
`3 The Court notes that Plaintiff has not suffered any damage additional to that accrued in its breach of contract
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`claim.
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 7 of 11
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`March 1, 2021, twelve (12) days after the close of discovery in this case, attached as an exhibit to
`his Reply Memorandum in Support of Motion to Extend Discovery Deadline. (ECF No. 21 at pp.
`8-21).4 Given that Davydov failed to produce the Independent Agent Agreement before the
`discovery cut-off, Davydov is precluded from introducing the same to support any counterclaim
`against Baluma. See FED. R. CIV. P. 37(c) (“If a party fails to provide information or identify a
`witness as required by Rule 26(a) or (e), the party is not allowed to use that information or
`witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was
`substantially justified or is harmless.”). Accordingly, the Court refuses to consider the contract
`pursuant to Rule 26. Without the contract, the Court finds no basis for the alleged affirmative
`defenses and breach of contract claims. However, even if the document was timely, or its
`consideration was considered harmless, the Court would still grant summary judgment to
`Plaintiff\Counterdefendant on Davydov’s counterclaims\affirmative defenses.
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`A. Affirmative Defenses of Setoff and Recoupment
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`Davydov’s first and second counterclaims allege entitlement to Setoff and Recoupment.
`In each claim, Davydov alleges to have been an invited guest of Chow and that on previous trips
`(a) Davydov had been credited for certain expenses and (b) not been held responsible for the
`repayment of lines of credit allegedly issued to Davydov. See Ans., ECF No. 19, 6:21-8:5.
`Davydov further alleges that he has two categories of valid and enforceable debts against the
`Casino. First Davydov alleges he holds a valid debt against the Casino in the form of uncredited
`expenses the Casino agreed to cover. Id. Second, Davydov alleges he holds a valid debt against
`the Casino “equivalent to the amount of the credit line Plaintiff agreed to waive and/or deem paid
`as part of its payments to Mr. Chow of commissions…” Id. at 7:3-20.
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`Setoff and recoupment are equitable defenses under which a defendant may seek to offset
`sums owing to the plaintiff against sums owing from the plaintiff to the defendant. See Newbery
`Corp. v. Fireman’s Fund Ins. Co., 95 F.3d 1392, 1398 (9th Cir. 2006) (citing Citizens Bank of
`Maryland v. Strumpf, 516 U.S. 16, 18 (1995). “The right of setoff is permissive, not mandatory;
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`4 The motion to extend the discovery deadline was denied without prejudice by the magistrate. Defendant
`could have filed objections to the order or could have renewed its motion to extend the discovery deadline. He did
`neither. Therefore, disclosure of the contract was untimely.
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`its application ‘rests in the discretion of [the] court, which exercises such discretion under the
`general principles of [equity].’ [] ‘The burden of proving an enforceable right of setoff rests with
`the party asserting the right.’” Id. at 1399. The doctrine of setoff is intended to avoid “the
`absurdity of making A pay B when B owes A.” Citizens Bank of Maryland, 516 U.S. at 18.
`Recoupment, on the other hand, “is the setting up of a demand arising from the same transaction
`as the plaintiff’s claim or cause of action, strictly for the purpose of abatement or reduction of
`such claim.” Newbery Corp., 95 F.3d at 1399.
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`Even if the Court were to consider the Independent Agent Agreement, Davydov has not
`produced any evidence to establish a right to setoff or recoupment. The Independent Agent
`Agreement is devoid of any reference to Davydov or any rights he obtains by way of that
`agreement. See MSJ, Ex. 8, Independent Agent Agreement. The agreement between Baluma and
`non-party Chow is devoid of any clause or representation that establishes any debt in Davydov’s
`favor against Baluma for alleged uncredited expenses. Nor has Davydov produced any evidence
`in the case demonstrating amounts that he allegedly believes he is entitled to under his claims.
`Davydov has not met his burden to establish that genuine issues of fact must be resolved by a
`fact finder.
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`Regarding Davydov’s assertion that he holds a valid debt against Baluma “equivalent to
`the amount of the credit line Plaintiff agreed to waive and/or deem paid as part of its payments to
`Mr. Chow of commissions…”, Davydov’s reliance on the Independent Agent Agreement is
`again misplaced. With respect to the commissions to be paid to Chow (again, not Davydov), the
`Independent Agent Agreement provides:
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`No compensation will be paid until all credit instruments have been
`paid in full by the applicable customer. If any credit balances are
`turned over to collections or a settlement becomes necessary, any
`commissions related thereto shall be forfeited unless expressly
`authorized in writing by an office of the Company or Casino.
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`Ex. 8, Independent Agent Agreement, p. 5. Thus, the Independent Agent Agreement itself
`provides that in an instance such as this, where Davydov has admittedly not repaid all amounts
`due under the credit instrument at issue (i.e. the Markers) Chow is not entitled to any
`commission whatsoever. It follows that Davydov is not entitled to any sort of setoff or
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`recoupment. Further, Davydov has not provided this Court with evidence to the contrary. See
`Newbery Corp., 95 F.3d at 1398. In other words, there would be no commission owed to Chow
`for Davydov’s gambling upon which Davydov could claim an offset because Davydov failed to
`repay the amount due under the Markers. Nor has he produced any evidence purporting to
`represent or support any commissions otherwise owed to Chow for which he believes he may be
`entitled to credit.5 As the Independent Agent Agreement upon which Davydov’s Counterclaim
`rests does not afford him any right on its face and because Davydov has not presented any
`evidence that he would be entitled to a credit with respect to the non-party’s commissions, the
`Court grants summary judgment in Baluma’s favor as to Davydov’s First and Second
`Counterclaims for Setoff and Recoupment.
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`B. Contract Counterclaims
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`Davydov’s Third and Fourth Counterclaims allege breach of contract and breach of the
`implied covenant of good faith and fair dealing arising out of the same Independent Agent
`Agreement. In claiming rights under the Independent Agent Agreement, Davydov claims that he
`“is an intended third-party beneficiary of the Independent Agent Agreement.” Ans., ECF No. 19,
`8:17-23. However, Davydov holds no third-party rights under the Independent Agent Agreement,
`on its face or as a matter of law, and cannot establish a claim for breach of contract or breach of
`the implied covenant of good faith and fair dealing.
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`To establish a claim for breach of contract, Davydov must establish “(1) formation of a
`valid contract; (2) performance or excuse of performance by the plaintiff; (3) material breach by
`the defendant; and (4) damages.” See Laguerre, 837 F. Supp. 2d at 1180. To obtain status as a
`third party beneficiary, “there must clearly appear a promissory intent to benefit the third party,
`and ultimately, it must be shown that the third party’s reliance thereon is foreseeable.” Lipshie v.
`Tracy Inv. Co., 566 P.2d 819, 824-25 (1977). For one to be considered a third party beneficiary,
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`5 Defendant has attached and made reference to some spreadsheets that have supposedly been produced by
`Plaintiff in this action. However, the spreadsheets, in Spanish, contain no translation. They are not Bates stamped, so
`it is unclear who produced the documents and in which action. Further, Defendant has not made clear how these apply
`to the debt he accrued in or about January 2020. Defendant is required to produce admissible evidence raising genuine
`issues of material fact. Defendant has failed to even meet the standards for admissibility. It is unclear if these are
`relevant or reliable documents. Further, they require untenable amounts of speculation on the part of the Court to
`determine what they even contain.
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`the underlying agreement must be made for that party’s benefit. See Olson v. Iacometti¸ 533 P.2d
`1360, 1363 (1975). “The fact that he might incidentally benefit by the performance of the
`agreement is insufficient.” Id. “Whether an individual is an intended third-party beneficiary turns
`on the parties’ intent, ‘gleaned from reading the contract as a while in light of circumstance under
`which it is entered” Wright v. Incline Village Gen. Improvement Distr., 597 F. Supp. 2d 1191,
`1205 (D. Nev. 2009).
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`Here, the Independent Agent Agreement makes absolutely no reference to Davydov nor
`does the Independent Agent Agreement provide that Chow’s commissions are to be used first to
`pay back amounts owed by any applicable player. Indeed, the Independent Agent Agreement
`provides quite to the contrary in that it expressly outlines that Chow would not be paid
`commissions “until all credit instruments have been paid in full by the applicable customer.” Ex.
`8, Independent Agent Agreement, p. 5. Further, nothing in the Independent Agent Agreement
`obligates Chow to pay down debts owed to Baluma by any particular party by utilizing his
`commissions, let alone specifically Davydov. At best, Davydov incidentally benefitted from the
`Independent Agent Agreement which is insufficient to establish third-party beneficiary status.
`See Olson, 533 P.3d at 1363.
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`Ultimately, the evidence in the record, even considering the Independent Agent
`Agreement, demonstrates unequivocally that Davydov is not entitled to bring claims for Breach
`of Contract or Breach of the Implied Covenant of Good Faith and Fair Dealing. Given the
`complete absence of any evidence to support Davydov’s contract-based counterclaims, the Court
`grants summary judgment in Baluma’s favor on the contract counterclaims.
`V. Damages
`“[C]ontract damages are prospective in nature and are intended to place the nonbreaching
`party in as good a position as if the contract had been performed.” Colorado Env’ts, Inc. v.
`Valley Grading Corp., 779 P.2d 80, 84 (Nev. 1989). Based on this record, the Court finds that
`Baluma has met its obligation on summary judgment and that Davydov has not presented
`evidence to create a triable issue. Therefore, the Court grants Baluma’s motion on its breach-of-
`contract claim and awards damages in the amount of $100,000.00.
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`Case 2:20-cv-01552-KJD-NJK Document 33 Filed 03/24/22 Page 11 of 11
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`VI. Conclusion
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`Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary Judgment
`(#24) is GRANTED;
`IT IS FURTHER ORDERED that the Clerk of the Court enter JUDGMENT in the
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`amount of $100,000.00 in favor of Plaintiff/Counterdefendant and against
`Defendant/Counterclaimant.
`Dated this 24th day of March, 2022.
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`____________________________
`Kent J. Dawson
`United States District Judge
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