Las Vegas Sands, LLC v. Amine Nehme

Filing

FILED OPINION (A. WALLACE TASHIMA, CARLOS T. BEA and LINDA R. READE) REVERSED AND REMANDED. Judge: CTB Authoring, FILED AND ENTERED JUDGMENT. [7607083]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LAS VEGAS SANDS, LLC, a Nevada
limited liability company, DBA
Venetian Resort Hotel Casino,
Plaintiff-Appellee,
AMINE

v.
T. NEHME,
Defendant-Appellant.





No. 09-16740
D.C. No.
2:07-cv-01012-BESRJJ
OPINION

Appeal from the United States District Court
for the District of Nevada
Brian E. Sandoval, District Judge, Presiding
Argued and Submitted
June 17, 2010—San Francisco, California
Filed January 11, 2011
Before: A. Wallace Tashima and Carlos T. Bea,
Circuit Judges, and Linda R. Reade, Chief District Judge.*
Opinion by Judge Bea

*The Honorable Linda R. Reade, Chief United States District Court
Judge for the Northern District of Iowa, sitting by designation.

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COUNSEL
Gary Logan, Esq., Las Vegas, Nevada, for the defendantappellant.

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Von S. Heinz, Lewis and Roca LLP, Las Vegas, Nevada, for
the plaintiff-appellee.

OPINION
BEA, Circuit Judge:
This diversity action arises out of a gambling debt Amine
T. Nehme (“Nehme”) is claimed to owe Las Vegas Sands,
LLC (the “Venetian”), on an unpaid casino “marker” in the
amount of $499,000, plus interest.
A marker is a gambling credit instrument that allows a
gambler to receive all or part of the credit line the casino has
approved for him, based on the gambler’s prior credit application with the casino. Once the gambler and a casino representative sign the marker, the gambler may exchange the marker
for gambling tokens, or chips. If the gambler does not pay the
marker when he has finished gambling, the marker is outstanding and the casino may later submit the marker, like a
check, to the gambler’s bank for payment.
On cross-motions for summary judgment, the district court
excluded from evidence two key documents proferred by
defendant Nehme on the ground they were not properly
authenticated by an affidavit made on personal knowledge:
(1) a letter from one of Nehme’s attorneys that predated
Nehme’s unpaid marker by seven months and that requested,
on Nehme’s behalf, that the Venetian cancel and not renew,
under any circumstances, Nehme’s credit line; and (2) a U.S.
Postal Service return receipt, dated three days after the letter,
that recites someone at the Venetian may have received
Nehme’s attorney’s letter before Nehme signed the marker.
The district court then granted summary judgment to the
Venetian on claims that Nehme had failed to pay a negotiable
instrument (the marker), and had breached a contract (a prior

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credit application agreement and the marker). The district
court denied Nehme’s motion for reconsideration, and Nehme
timely appealed.
We conclude that the district court abused its discretion in
excluding the above pieces of evidence under an incorrect
legal standard and that this error was not harmless. Thus, we
reverse and remand with instructions that the district court
consider such evidence under the correct legal standard.
Factual and Procedural Background
Nehme, a California resident, is a repeat gambler at the
Venetian, a Nevada limited liability company. The Venetian
operates a licensed Las Vegas casino. It followed the standard
industry procedures when it extended credit to Nehme. Those
procedures are set out by the Nevada Supreme Court in
Nguyen v. State, 14 P.3d 515, 516-17 (Nev. 2000):
A gambler applies for casino credit by completing a standard credit application form. Once the casino approves the
application and grants a line of credit to the gambler, the gambler may receive all or part of the credit line at a gambling
table in the form of a “marker.” The marker is an instrument,
usually dated, bearing the name of the gambler, the name and
account number of the gambler’s bank, and the instruction
“Pay to the Order of” the casino for a specific value in U.S.
dollars. Once the gambler and a casino representative sign the
marker, the gambler may then exchange the marker for gambling tokens, or chips. If the gambler does not pay the marker
when he has finished gambling, the marker is outstanding and
the casino may submit the marker to the gambler’s bank for
payment as if it were a check on the gambler’s account at the
bank.
In this case, Nehme applied for a line of credit with the
Venetian on March 13, 2004 by completing a standard credit
application form. In the Venetian credit application, Nehme

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set out his name, address, social security number, and
employment information. The bottom of the credit application
provided, in pertinent part: “Before drawing on my line of
credit, if granted, I agree to sign credit instruments in the
amount of the draw. . . . Each draw against my credit line constitutes a separate loan of money. . . . I will sign a credit
instrument in the amount of the loan.” By signing the credit
application, Nehme “agree[d] to repay all loans and draws
against [his] credit line in accordance with the terms agreed
to in [his] credit file.” Most important for this appeal, the
credit application provided: “The Venetian Resort-HotelCasino endorses responsible gaming. We will cancel or
reduce your credit line upon your request.”
Under Nehme’s credit application, the Venetian approved
a $200,000 initial credit line for Nehme in March 2004, and
extended that credit line to $350,000 in May 2004 and then
to $500,000 in July 2004. Nehme gambled at the Venetian
several times in 2004 and 2005. On February 8, 2005, a Mr.
Bennett, purporting to be Nehme’s attorney, sent a return
receipt letter to the Venetian “requesting that all credit lines
established by [Nehme] or on his behalf immediately be terminated and that no further credit be extended to him under
any circumstances.” Mr. Bennett received a U.S. Postal Service return receipt that purports to show someone at the Venetian may have signed for the letter on February 11, 2005, over
the address shown for the Venetian. By August 2005, Nehme
had repaid all gambling debts he owed to the Venetian.
Nehme returned to the Venetian over Labor Day weekend
in September 2005. Nothing in the record demonstrates Mr.
Bennett’s letter was questioned, rejected or answered by the
Venetian, or withdrawn by Nehme directly or through a representative. Neither is there any proof that Nehme executed a
new credit application.
On Labor Day, September 5, 2005, Nehme signed a casino

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marker for $500,000 payable to the Venetian.1 Nehme
exchanged the marker for chips and lost all $500,000 worth
of chips playing Blackjack. Nehme then left the Venetian with
the marker outstanding. On January 5, 2006, the Venetian
presented for payment the $500,000 marker to Bank of America, the bank specified on the marker, but the marker was
returned for insufficient funds. The Venetian applied a $1,000
safekeeping deposit to the unpaid marker, such that it now
claims Nehme owes it $499,000 in gambling debt, plus interest.
In July 2007, the Venetian sued Nehme in Nevada state
court for (1) failure to pay a negotiable instrument (i.e.,
Nehme’s casino marker); (2) breach of contract (i.e., the
Venetian credit application agreement and the marker); and
(3) unjust enrichment. That same month, Nehme removed this
case to federal court in the District of Nevada based on diversity of citizenship jurisdiction. In April 2008, the Venetian
filed a motion for summary judgment. Later that month
Nehme filed an opposition, to which he attached an unsigned
copy of the Bennett February, 2005, letter. Then, in September 2008, Nehme filed a cross-motion for summary judgment,
1

By signing the marker, Nehme agreed to the following terms printed
on the face of the marker:
I authorize payee to complete any of the following items on this
negotiable instrument: (1) any missing amounts; (2) a date; (3)
the name, account number and/or address and branch of any bank
or financial institution; and (4) any electronic encoding of the
above items. This information can be for any account from which
I may now have and/or in the future have the right to withdraw
funds, irrespective of whether I provide the information on the
account to the payee. I acknowledge that I incurred the debt evidenced by this instrument in Nevada. I agree that any dispute
regarding or involving this instrument, the debt, or the payee, be
brought in a Nevada court and shall be governed by Nevada law.
I hereby submit to the jurisdiction of any court, state or federal,
in Nevada. In addition to any amounts authorized by law, I agree
to pay all cost or collection, including the payee’s attorneys fees
and court costs, plus interest thereon at 18% APR.

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to which he attached, in pertinent part, a signed copy of
another Bennett letter, a postal service return receipt for the
unsigned Bennett letter, and excerpts from the deposition testimony of Venetian employees.2
The district court, sua sponte and without a hearing,
excluded the Bennett letters, the return receipt for the
unsigned Bennett letter, and the deposition excerpts on the
ground they were not properly authenticated.3 The district
court granted summary judgment to Nehme on the Venetian’s
unjust enrichment claim on the ground this claim is unavailable where a written contract (i.e., the credit application
agreement) exists.4 The district court then granted summary
judgment to the Venetian on the claims of failure to pay a
negotiable instrument and breach of contract, on the ground
that no triable issue of fact remained as to the elements of
those two claims and that there was no evidence to raise a triable issue of fact as to any of Nehme’s affirmative defenses
to liability. The district court also refused to consider
Nehme’s defense of contract rescission, in part because
Nehme had not pleaded that defense in his answer.
Nehme filed a motion for reconsideration, to which he
attached an affidavit from his attorney, Bennett, that authenti2
Local Rule 7056 in the District of Nevada does not require Nehme to
file his cross-motion for summary judgment at the same time as his opposition to the summary judgment motion; the district court considered the
cross-motion.
3
We note that Mr. Bennett did not represent Nehme in the proceedings
before the district court. He did not inform the district court that he wrote
and mailed the Bennett letter. We also note that the district court did not
hold oral argument on the parties’ cross-motions for summary judgment
and, therefore, Nehme did not have an opportunity to respond to the district court’s ruling as to lack of authenticity of foundational evidence,
which excluded the Bennett letter and its return receipt.
4
The Venetian did not cross-appeal the grant of summary judgment to
Nehme on its unjust enrichment claim. Thus, this claim is not at issue on
appeal.

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cated the unsigned Bennett letter and its postal service return
receipt, as well as properly authenticated deposition excerpts
regarding the Venetian’s credit line cancellation policy. The
district court denied the motion, and Nehme timely appealed.
Jurisdiction and Standard of Review
We have jurisdiction under 28 U.S.C. § 1291. We review
de novo the district court’s grant of summary judgment to
“determine, viewing the evidence in the light most favorable
to the nonmoving party and drawing all justifiable inferences
in its favor, whether there are any genuine issues of material
fact and whether the moving party is entitled to judgment as
a matter of law.” Orr v. Bank of Am., NT & SA, 285 F.3d 764,
773 (9th Cir. 2002). Where the parties file cross-motions for
summary judgment, the court must consider each party’s evidence, regardless under which motion the evidence is offered.
Fair Hous. Council v. Riverside Two, 249 F.3d 1132, 1136
(9th Cir. 2001).
Analysis
The district court granted summary judgment to the Venetian after it had excluded an unsigned copy of the Bennett letter attached as an exhibit to Nehme’s opposition to the
Venetian’s motion for summary judgment, as well as a signed
copy of the Bennett letter, a postal service return receipt for
the unsigned Bennett letter, and deposition excerpts attached
as exhibits to Nehme’s cross-motion for summary judgment.
Because the district court excluded the unsigned Bennett letter
and its return receipt under an incorrect legal standard, and
because under the correct legal standard those two items
might be received in evidence—and if so, raise triable issues
of material fact—as to Nehme’s affirmative defense against
the Venetian based on an alleged material breach of their
credit application agreement, we reverse and remand to the
district court to apply the correct legal standard.5 We need not,
5

We do not consider the signed Bennett letter, for which there is no
return receipt, and which was addressed not to an employee at the Vene-

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and do not, decide whether the district court’s other evidentiary rulings were proper.
I.
We review the district court’s exclusion of evidence in a
summary judgment motion for abuse of discretion. Orr, 285
F.3d at 773. Under United States v. Hinkson, 585 F.3d 1247,
1251, 1262 (9th Cir. 2009) (en banc), a district court abuses
its discretion if it applies an incorrect legal standard to decide
an issue. If, however, the district court applies the correct
legal standard, there is no abuse of discretion unless the district court’s findings of fact, and its application of those findings of fact to the correct legal standard, are illogical,
implausible, or without support in inferences that may be
drawn from facts in the record. Id.
The district court abused its discretion in excluding the
Bennett letter and its postal service return receipt because the
district court applied an incorrect legal standard to consider
those pieces of evidence and, therefore, failed properly to
consider whether the Bennett letter and its return receipt were
authenticated by their distinctive characteristics.
[1] In Orr, we made clear that “unauthenticated documents
cannot be considered in a motion for summary judgment.”
Orr, 285 F.3d at 773. The authentication of a document
requires “ ‘evidence sufficient to support a finding that the
matter in question is what its proponent claims.’ ” Id. (quoting
Fed. R. Evid. 901(a)). A document authenticated through personal knowledge must be attached to an affidavit, and the affitian, but rather to an employee at Caesars Palace, another Las Vegas
casino. This signed letter suggests that Nehme also had a credit line at
Caesars Palace, but the record is silent on this point and it is irrelevant to
the present case. From this point forward, we therefore refer to the
unsigned Bennett letter simply as “the Bennett letter.”

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ant must be a competent “ ‘witness who wrote [the
document], signed it, used it, or saw others do so.’ ” Id. at
773-74 & n.8 (quoting Fed. R. Evid. 901(b)(1)). But the
requirement that documents be authenticated through personal
knowledge when submitted in a summary judgment motion
“is limited to situations where exhibits are introduced by
being attached to an affidavit” of a person whose personal
knowledge is essential to establish the document is what it
purports to be—that it is authentic. Id. at 778 n.24. Where
documents are otherwise submitted to the court, and where
personal knowledge is not relied upon to authenticate the document, the district court must consider alternative means of
authentication under Federal Rules of Evidence 901(b)(4).6
Orr, 285 F.3d at 777-78. Under Rule 901(b)(4), “documents
. . . could be authenticated by review of their contents if they
appear to be sufficiently genuine.” Orr, 285 F.3d at 778 n.24
(noting that district courts have authenticated letters “by the
linkage between the dates of postmarks and defendant’s location on the days [the] letters [were] mailed” and a diary “by
reviewing its contents”).
[2] Here, the district court excluded the Bennett letter and
its return receipt on the sole ground that those two pieces of
evidence must be authenticated by a competent witness with
personal knowledge of their authenticity. The Bennett letter
was attached as an exhibit to Nehme’s opposition to the Venetian’s motion for summary judgment, and the return receipt
for that letter was attached as an exhibit to Nehme’s crossmotion for summary judgment. Neither was attached as an
exhibit to an affidavit of a person offering his personal knowledge of how the document was prepared as the basis for the
court to find the document is authentic. Thus, the district court
applied an incorrect legal standard because, as set out above,
6

Federal Rule of Evidence 901(b)(4) provides that authentication sufficient for admissibility can be satisfied by the object’s “[a]ppearance, contents, substance, internal patterns, or other distinctive characteristics, taken
in conjunction with circumstances.” Fed. R. Evid. 901(b)(4).

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the Bennett letter and its return receipt could have been
authenticated by review of their contents if they appeared to
be sufficiently genuine.7 In this respect, the Bennett letter was
dated February 8, 2005, written on the letterhead of an attorney who stated he represented Nehme, addressed to Mr. Morcos at the Venetian, and printed a reference to the same
certified mail number that is on the postal service return receipt.8
The return receipt is date stamped February 11, 2005, three
days after the letter’s date, is also addressed to Mr. Morcos at
the Venetian, and purports to be a “Domestic Return Receipt”
for certified mail carrying the same certified mail number as
does the Bennett letter. These characteristics could be sufficient to support a finding the Bennett letter was sent to the
Venetian on February, 8, 2005, and was received by the
Venetian on February 11, 2005.
[3] The district court, having relied on an incorrect legal
standard, did not make a finding whether the Bennett letter
and its return receipt could be authenticated by their distinctive characteristics under Federal Rule of Evidence 901(b)(4).
Under Hinkson, the district court therefore abused its discretion in failing to apply the correct legal standard. Upon
remand, application of the correct legal standard may lead to
the admission of such items of proferred evidence.
II.
Where, as here, the district court abuses its discretion, so to
exclude evidence in a summary judgment motion, we must
apply a harmless error analysis. Orr, 285 F.3d at 773. We will
reverse the district court if the district court’s evidentiary rul7

Nehme does not contend that the return receipt is a self-authenticating
document, and we need not, and do not, decide that issue.
8
In lieu of a signature, the Bennett letter bears the phrase “Dictated but
not Read for Expedient Delivery” followed by the name “Leon F. Bennett” in typeface. The Bennett letter then concludes with the text “LFB:
vk” and “cc: Tom Nehme.”

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ing was “prejudicial”—i.e., consideration of improperly
excluded evidence would have precluded a grant of summary
judgment, or warranted a grant of summary judgment to the
other party. See id. at 773, 779 n.27.
Here, after erroneously excluding the Bennett letter and its
return receipt, the district court granted summary judgment to
the Venetian on two claims against Nehme: (1) failure to pay
a negotiable instrument (i.e., Nehme’s unpaid casino marker);
and (2) breach of contract (i.e., the Venetian credit application
agreement and the marker). The district court did so on the
ground that no triable issue of fact remained as to the elements of those two claims, and that there was no evidence to
raise a triable issue of fact as to any of Nehme’s affirmative
defenses to liability. Those defenses, set out in Nehme’s
cross-motion for summary judgment, include: (1) the credit
application agreement nullified the marker under the Nevada
Uniform Commercial Code (“UCC”); (2) the breach of a
material term of the credit application agreement discharged
Nehme’s duty to pay the marker under Nevada common law
contract principles; and (3) Nehme unilaterally rescinded the
credit application agreement by virtue of the Bennett letter.
Nevada substantive law controls in this diversity action.
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (“[F]ederal
courts sitting in diversity apply state substantive law and federal procedural law.”). The credit application agreement and
the marker both specify Nevada law as the controlling law.
The UCC is codified in Nevada at NRS 104.1101 et seq.9 As
set out below, the district court’s exclusion of the Bennett letter and its return receipt upon an erroneous basis was not
harmless error, because these items of evidence do raise a triable issue of fact as to Nehme’s nullification defense under
the UCC, and they raise a triable issue of fact as to Nehme’s
defense based on common law contract principles. We need
not, and do not, address Nehme’s rescission defense.
9

All “NRS” references are to provisions of the Nevada Revised Statutes.

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A.
The first claim in the Venetian’s complaint against Nehme
is for failure to pay the marker, which is a negotiable instrument and a check under the Nevada UCC.
1.
[4] The Venetian has a right to enforce the marker against
Nehme as a valid debt obligation unless Nehme can establish
a defense to liability. In Nehme’s opposition to the Venetian’s
motion for summary judgment, he conceded that the marker
“constitutes both a negotiable instrument and a check according to the definition of these terms in NRS 104.3104.” Subsection 6 of NRS 104.3104 provides that “[a]n order that
meets all of the requirements of subsection 1, . . . and otherwise falls within the definition of ‘check’ in subsection 6 is
a negotiable instrument and a check.” In pertinent part, subsection 1 defines a negotiable instrument as “an unconditional
. . . order to pay a fixed amount of money . . . if it . . . [i]s
payable on demand or at a definite time; and . . . [d]oes not
state any other undertaking by the person promising or ordering payment to do any act in addition to the payment of
money[.]” One definition of a check in subsection 6 is a “draft
. . . payable on demand and drawn on a bank.”10
[5] Here, the marker is a negotiable instrument and a check
because it provides a mechanism for payment of $500,000
from Bank of America to the order of the Venetian,11 is signed
10
“A draft is a written order by the first party, called the drawer,
instructing a second party, called the drawee (such as a bank), to pay
money to a third party, called the payee.” Nguyen, 14 P.3d at 517-18
(internal quotation marks and brackets omitted).
11
It appears the line following the instruction “PAY TO THE ORDER
OF” is blank, in which case the marker is bearer paper payable to the
Venetian as the holder of the marker. See, e.g., Wilson County v. Third
Nat’l Bank, 103 U.S. 770, 776 (1880); Gruber v. Baker, 23 P. 858, 861
(Nev. 1890).

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by Nehme,12 and is payable on demand because it states no
time or date of payment. See Nguyen, 14 P.3d at 518. On the
face of the marker, the order is unconditional and states no
undertakings by Nehme other than to pay a specific sum of
money. The marker therefore was valid and enforceable as a
negotiable instrument under Nevada law. See Mandalay
Resort Group v. Miller (In re Miller), 292 B.R. 409, 414
(B.A.P. 9th Cir. 2003) (holding that a casino marker, and the
gambling debt the marker represents, “ ‘are valid and may be
enforced by legal process’ ” (quoting NRS 463.368(1)). The
Venetian presented the marker to Bank of America for payment, and the marker was returned for insufficient funds.
Thus, the Venetian has a right to enforce the marker against
Nehme unless Nehme can establish a defense to liability. See
NRS 104.3103 cmt. 2 (“Dishonor by any drawee named in the
draft entitles the holder to rights of recourse against the drawer[.]”); see also NRS 104.3503 (“[N]otice of dishonor is no
longer relevant to the liability of a drawer[.]”).
We now turn to consider whether the evidence—including
the erroneously rejected items—properly considered, could
make out triable issues of fact as to whether the Venetian was
indeed a holder in due course, or, to the contrary, a holder
with knowledge of personal defenses.
2.
The Bennett letter and its return receipt raise a triable issue
of fact as to whether the Venetian’s right to enforce the
marker against Nehme is subject to Nehme’s defense based
on common law contract principles and the UCC affirmative
defense.
12

On appeal, Nehme contends for the first time that the Venetian never
authenticated the marker. Even assuming this argument is not waived, it
is to no avail. See Fed. R. Evid. 902(9) (“Commercial paper, signature
thereon, and documents relating thereto” are self-authenticating).

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[6] At the outset, the Venetian is not a “holder in due
course,” i.e., “one who takes the instrument (1) for value, (2)
in good faith and (3) without notice that it is overdue or has
been dishonored or of any defenses or claims to it.” Id. This
is important because “[h]older in due course status operates to
insulate the holder from certain defenses to the instrument of
any party with whom the holder has not dealt.” Id. (citing
NRS 104.3305). The Venetian had dealt with Nehme, and was
a party to both the credit application and the marker. If the
Venetian is proved to have knowledge of the purported credit
application cancellation, per the Bennett letter, the Venetian
was aware of defenses to the marker. Nevada law makes the
Venetian “subject to all defenses of [Nehme,] a party with
whom the holder has dealt.” Id. (citing NRS 104.3305).
“These defenses comprise those specifically stated in Article
3 [of the UCC as codified in Nevada] and those based on
common law contract principles.” NRS 104.3305 cmt. 2
(emphasis added).
Nehme contends that “the Venetian was under a contractual
duty to cancel Nehme’s credit line following receipt of the
Bennett letter.” According to Nehme, the Venetian’s failure to
cancel his credit line, and its decision to extend him $500,000
of credit under the marker, was a material breach of the credit
application agreement and, therefore, discharged his duty to
pay the marker under common law contract principles.
[7] Under Nevada law, “[a] breach of contract may be said
to be a material failure of performance of a duty arising under
or imposed by agreement.” Bernard v. Rockhill Dev. Co., 734
P.2d 1238, 1240 (Nev. 1987). Whether a party has breached
a contract and whether the breach is material are questions of
fact. Hoffman v. Eighth Judicial Dist. Court, 523 P.2d 848,
850 (Nev. 1974). It is well-established at common law that
“[a] breach or non-performance of a promise by one party to
a bilateral contract, so material as to justify a refusal of the
other party to perform a contractual duty, discharges that
duty.” Restatement (First) of Contracts § 397. Nevada courts

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have long recognized this principle. See, e.g., Thornton v.
Agassiz Constr., Inc., 799 P.2d 1106, 1108 (Nev. 1990)
(“Payment of the purchase price is excused where respondent’s breach was material.”); Young Elec. Sign Co. v. Fohrman, 466 P.2d 846, 847 (Nev. 1970) (“The lessee’s material
breach in failing to pay rent excused further performance by
the lessor.” (citing Restatement (First) of Contracts § 397)).
[8] Here, the credit application agreement was a bilateral
contract between Nehme and the Venetian. Nehme promised
“to repay all loans and draws against [his] credit line,” to
“sign a credit instrument in the amount of [each] loan,” and
“to sign credit instruments in the amount of [each] draw.” In
return, the only express promise that the Venetian made to
Nehme on the face of the credit application was that, if it
granted Nehme a line of credit, it would “cancel or reduce
[his] credit line upon [his] request.” The Venetian made this
promise for the purpose of ensuring “responsible gaming.”
There is a triable issue of fact as to whether this credit cancellation promise, as the only express promise that the Venetian
made to Nehme on the face of the credit application agreement, is a material term of the bilateral contract between
Nehme and the Venetian. See Powers v. United Servs. Auto.
Ass’n, 962 P.2d 596, 601 (Nev. 1998) (“[W]here materiality
must be shown by matters outside the terms of the contract,
it is a question of fact.” (internal quotation marks omitted)).
[9] The more difficult question is whether the credit application agreement and the marker were part of the same transaction, such that a material breach of the credit application
could serve as a breach of contract defense to the enforcement
of not only the credit application agreement, but also the
marker. The parties do not offer, nor can we find, any authority that directly resolves this question as a matter of law. In
Nguyen, however, the Nevada Supreme Court did suggest
that, under “standard industry procedures” in Nevada, a
casino marker generally goes hand in hand with a prior credit
application agreement. 14 P.3d at 516-17. Other courts, apply-

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ing Nevada law, have made the same suggestion. See, e.g., In
re Miller, 292 B.R. at 414 (“Debtor acknowledges in the
application and markers that he incurred [gambling] debt in
Nevada.” (emphasis added)); Fleeger v. Bell, 95 F. Supp. 2d
1126, 1127 (D. Nev. 2000) (“Upon approval of this credit
application by Desert Palace, a patron may request the issuance of . . . casino ‘markers.’ ”); Casino-Hotel v. Caram, 762
F. Supp. 286, 288 (D. Nev. 1991) (“The application and the
[marker] which Defendant signed create an enforceable debt
under Nevada [law].” (emphasis added)); see also Harrah’s
Tunica Corp. v. Meeks (In re Armstrong), 291 F.3d 517, 521
(8th Cir. 2002) (“Armstrong signed a ‘Casino Credit Application’ in order to obtain markers from Harrah’s.”).
[10] We therefore conclude that a casino marker and a
credit application agreement may be, but need not be, part of
the same transaction. Whether a particular casino marker
relates to a particular credit application agreement, such that
they are part of the same transaction, is necessarily a question
of fact. First, and most importantly, the evidence from the
credit application’s own language seems to establish that
unless and until Nehme signed the credit application, the
Venetian would not accept his marker and give him chips.
Thus, there is a triable issue of fact as to whether Nehme’s
marker was part of the same transaction as his prior credit
application agreement with the Venetian. Although it may be
possible to view Nehme’s marker and the parties’ credit application agreement as two discrete credit transactions, a reasonable jury could find that the marker was part of the same
underlying transaction as the credit application agreement—
i.e., that Nehme received the marker because he drew on a
$500,000 line of credit he had established at the Venetian
through the prior credit application agreement. Notably, the
credit application agreement contemplated that Nehme would
sign future “credit instruments,” such as the marker. Moreover, the marker bears the same account number as appears
on the credit application agreement. Finally, the $500,000
marker was for the exact amount of Nehme’s credit limit at

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the Venetian, as Nehme had repaid all prior gambling debts
before he signed the marker.
[11] The Bennett letter and its return receipt therefore raise
a triable issue of fact as to whether the Venetian was obligated, per the terms of the credit application agreement, to
cancel Nehme’s credit in February 2005—seven months
before Nehme signed the marker for $500,000, the full extent
of his credit line at the Venetian. Indeed, the Bennett letter
clearly instructed the Venetian to cancel Nehme’s credit line
and to extend him no further credit under any circumstances.
See Black’s Law Dictionary 233-34 (9th ed. 2009) (defining
cancel as “to terminate a promise, obligation, or right.”).
Thus, if the Venetian had received the Bennett letter and simply failed to cancel Nehme’s credit line through which markers were issued, the Venetian may well have been in material
breach of the credit application agreement, such that Nehme’s
duty to repay the marker would be discharged under common
law contract principles.
If, alternatively, the Venetian had received the Bennett letter, cancelled Nehme’s credit line, and simply reinstated that
credit line based on Nehme’s signing a $500,000 marker,
without the formality of a new credit application or any other
requirements, then the Venetian’s promise to ensure “responsible gaming” would be illusory. See Kennewick Irr. Dist. v.
United States, 880 F.2d 1018, 1032 (9th Cir. 1989)
(“Preference must be given to reasonable interpretations as
opposed to those that are unreasonable, or that would make
the contract illusory.” (internal quotation marks omitted)).
Furthermore, Nevada Gaming Commission Regulation
5.170(4) requires every gaming licensee, that engages in the
issuance of credit, to implement a program that allows casinopatrons to self-limit their access to the issuance of credit.
Such programs are required to contain “[s]tandards and procedures that allow a patron to be prohibited from access to
check cashing, the issuance of credit, and the participation in

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direct mail marketing of gaming opportunities.” Id. The deposition testimony of the Venetian casino executive, Manny
Morcos, establishes that the Venetian implemented such a
program, and that Nehme’s credit line would have been shut
down immediately upon receipt of the Bennett letter.13 Morcos’s testimony further establishes that Nehme’s credit could
not be reinstated without the permission of the Venetian’s
legal department. Under Venetian’s program, Nehme would
be required to send another letter requesting to open his credit
line and the Venetian’s legal department would have to
approve this request before any credit could be extended to
Nehme.
[12] Under Nevada law, a contract “ ‘may be explained or
supplemented . . . [b]y course of dealing or usage of trade . . .
or by course of performance[.]’ ” United Services Auto Ass’n
v. Schlang, 894 P.2d 967, 971 (Nev. 1995) (citing NRS
104.2202(1)). The meaning of the Venetian’s promise that it
“endorses responsible gaming” and it “will cancel or reduce”
the credit line can thus be explained by the Venetian’s program that is meant to allow casino-patrons to self-limit their
access to the issuance of credit. Thus, the Venetian’s promise
to “cancel or reduce” the credit line could be interpreted to
mean that once a credit line is cancelled, the lender cannot
lend under it until a casino-patrol requests to reinstate his
credit and until the Venetian’s legal department approves such
a request. In light of these facts, a jury could conclude that the
Venetian committed the first breach of the credit application
13

Morcos’s deposition was attached to a motion for reconsideration and
not an opposition to summary judgment. However, we can consider it as
part of the record. See Carmona v. Toledo, 215 F.3d 124, 132 n.7 (1st Cir.
2000) (“ [An] affidavit . . . attached to a motion for reconsideration, not
an opposition to summary judgment . . . should be considered part of the
record.”); see also, 10A Charles Alan Wright, Arthur R. Miller & Mary
Kay Kane, Federal Practice & Procedure § 2722 at 378 (3d ed. 1998) (“An
affidavit of a party that is on file in the case will be considered by the
court regardless of the purpose for which it was prepared and filed.”).

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when it extended Nehme credit after it received the Bennett
letter.
[13] Accordingly, the district court’s improper exclusion
of the Bennett letter and its return receipt was harmful
because those pieces of evidence raise a triable issue of fact
as to whether Venetian’s right to enforce the marker against
Nehme is subject to Nehme’s defense based on common law
contract principles.14
B.
[14] The second claim in the Venetian’s complaint against
Nehme is for breach of the Venetian credit application agreement, the unpaid casino marker, or both. As set out above, a
triable issue of fact remains as to whether the Venetian materially breached the credit application agreement by not cancelling Nehme’s credit upon receipt of the Bennett letter and
thereby discharged Nehme’s obligations under the credit
application. Moreover, a triable issue of fact remains as to
whether the marker related to the same bilateral contract as
the credit application agreement. Notably, the credit application contemplated the signing of future markers, the account
number on the marker matched that on the credit application,
and the marker was for the full extent of Nehme’s credit line
at the Venetian as established by the credit application agreement and subsequent credit line increases. Accordingly, the
district court’s improper exclusion of the Bennett letter and its
return receipt was harmful because those items, if admitted
into evidence, raise triable issues of fact as to whether Nehme
breached a contract he had with the Venetian.
14

We do not address the unrelated issue of whether Nehme had a “gambling problem,” which, in any event, is not a defense to a gambling debt
under Nevada law. See NRS 463.368(6) (“A patron’s claim of having a
mental or behavioral disorder involving gambling . . . [i]s not a defense
in any action . . . to enforce a credit instrument or the debt that the credit
instrument represents.”).

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Conclusion
For the reasons set out above, we reverse the district court’s
grant of summary judgment to the Venetian. We remand this
case to the district court for further proceedings, including its
determining whether the Bennett letter and its return receipt
are admissible under Federal Rule of Evidence 901(b)(4), and
if so, whether Nehme can prevail on his affirmative defense
against the Venetian based on an alleged material breach of
the credit application agreement.
REVERSED and REMANDED.