BHC Development, LC et al v. Bally Gaming, Inc

Filing 181

ORDER denying 175 defendant's motion to compel an election of remedies. Signed by Magistrate Judge James P. O'Hara on 02/25/2014. (mb)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
BHC DEVELOPMENT, L.C., et al.,
Plaintiffs,
v.

Case No. 12-2393-JPO

BALLY GAMING, INC.,
Defendant.
ORDER
This contractual dispute arises from the sale of casino management hardware and
software by defendant, Bally Gaming, Inc., to plaintiffs, BHC Development, L.C. and
BHCMC, L.L.C.—the developers and operators of Boot Hill Casino & Resort in Dodge
City, Kansas.
contract,

Plaintiffs filed suit against defendant asserting claims for breach of

negligent

misrepresentation,

and

breach

of

implied

warranty

of

merchantability.1 The matter is currently before the undersigned U.S. Magistrate Judge,
James P. O’Hara, on defendant’s motion to compel an election of remedies (ECF doc.
175). Defendant asks the court to direct plaintiffs to elect their remedies before trial
starts on March 3, 2014, to avoid confusing the jury and for the sake of efficiency.
Plaintiffs respond that they are not required to elect a remedy, if at all, until their claims
are submitted to the jury. For the reasons discussed below, defendant’s motion is denied.
1

Plaintiffs also brought claims for fraudulent inducement and breach of express
warranty but defendant was granted summary judgment on those claims (see ECF doc.
152).
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I.

Background
Plaintiffs allege defendant represented that its casino management software was

capable of performing certain functions before they executed a Purchase and License
Agreement (the “Agreement”). Plaintiffs assert that after the Agreement was executed,
they discovered that there were serious deficiencies with the software and that it did not
function correctly, which contradicted defendant’s prior representations. Accordingly,
plaintiffs are pursuing three claims against defendant: breach of contract; negligent
misrepresentation; and breach of implied warranty of merchantability. Defendant argues
that these are conflicting legal theories and plaintiffs must choose which of these theories
to pursue before trial begins.
II.

Analysis
The purpose of the election of remedies doctrine is not to prevent recourse to a

particular remedy but to prevent double redress for a single wrong.2 An election of
remedies is required only when the claims are inconsistent.3

To make actions

inconsistent, one action must allege what the other denies, or the allegations in one must
necessarily repudiate or be repugnant to the other.4
2

Mid Continent Cabinetry, Inc. v. George Koch Sons, Inc., 130 F.R.D. 149, 152 (D.
Kan. 1990) (citing Griffith v. Stout Remodeling, Inc., 219 Kan. 408, 411, 548 P.2d 1238,
1242 (1976)).
3

Id. (citing Equitable Life Leasing Corp. v. Abbick, 243 Kan. 513, 515, 757 P.2d 304,
306 (1988)).
4

Griffith, 219 Kan. at 411, 548 P.2d at 1242.

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2

As to the timing for an election of remedies, defendant acknowledges courts in the
District of Kansas have not definitively ruled on this issue. Nevertheless, defendant cites
Evolution v. SunTrust Bank, 342 F. Supp. 2d 964, 973 (D. Kan. 2004), where the court
stated that the defendants must choose their remedy “[b]efore or at the outset of trial.”
Plaintiffs respond that the Evolution court cited no authority in support of its proposition
and its decision is contrary to the clear pronouncements of Kansas state courts in two
previous cases—Patrons State Bank & Trust Co. v. Shapiro, 215 Kan. 856, 528 P.2d
1198 (1974), and Scott v. Strickland, 10 Kan. App. 2d 14, 691 P.2d 45 (1984) .
In Patrons State Bank & Trust Co., the defendant argued that it was error for the
lower court to submit the case to the jury upon two theories, fraud and conversion,
because they are inconsistent with one another.5 Since the two claims were submitted to
the jury as alternative theories of recovery, and since the plaintiff did not obtain double
recovery, the Kansas Supreme Court upheld the Kansas Court of Appeals decision to
submit both theories to the jury.6

In Scott, the plaintiffs raised implied warranty

allegations of both a contract and tort nature. The Kansas Court of Appeals found that
plaintiffs were entitled to present their alternative claims to the jury; however, one theory
or the other had to be elected prior to final submission to the jury.7

5

Patrons State Bank & Trust Co., 215 Kan. at 863, 528 P.2d at 1204.

6

Id. at 863, 528 P.2d at 1204.

7

Scott, 10 Kan. App. 2d at 18, 691 P.2d at 50.

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3

Although not cited by the parties, in Mid Continent Cabinetry, Inc., U.S.
Magistrate Judge John Thomas Reid of the U.S. District Court for the District of Kansas
held, “even assuming that the doctrine of election of remedies will apply in this case and
force plaintiff to choose between his contract and tort theories, it would be error to
require plaintiff to elect his remedies before trial.”8 Judge Reid relied upon Griffith v.
Stout Remodeling, Inc., where the Kansas Supreme Court held that it was error to require
a pretrial election of remedies by plaintiff between tort and breach of warranty in the
contract.9
In consideration of the foregoing, the court agrees with plaintiffs—allowing them
to present alternative theories to the jury poses no risk of double recovery provided
plaintiffs are required to elect one or the other before the jury decides the claim.10
Despite defendant’s assertion, evidence pertaining to plaintiffs’ claims will not revolve
around entirely separate sets of facts.

Rather, plaintiffs’ claims will likely involve

overlapping evidence. Furthermore, the court is not persuaded that allowing plaintiffs to
present evidence on all three claims would significantly lengthen the trial or confuse the
jury.

8

Mid Continent Cabinetry, Inc., 130 F.R.D. at 153 (citing Griffith, 219 Kan. at 413,
548 P.2d at 1243).
9

Griffith, 219 Kan. at 413, 548 P.2d at 1243.

10

See ECF doc. 179 at 4.

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4

In their response to defendant’s motion, plaintiffs address whether the limitation
on damages in the Agreement applies to their negligent misrepresentation claim.
However, that issue is not before the court. Defendant’s motion is confined to the issue
of whether plaintiffs must elect their remedies prior to trial. The court concludes that, on
the state of the record now before it, plaintiffs need not elect their remedies prior to trial.
Accordingly, defendant’s motion is denied. Any issues relating to the applicability of the
damages limitation to plaintiffs’ negligent misrepresentation claim may be addressed at a
later time, if appropriate.
IT IS SO ORDERED.
Dated February 25, 2014, at Kansas City, Kansas.

s/ James P. O’Hara
James P. O’Hara
U. S. Magistrate Judge

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