SEIBEL v. PHWLV, LLC

ascribing to their conduct. After discovering that appellant Rowen Seibel pleaded guilty to a felony tax crime, respondents terminated the agreements and filed a complaint for declaratory relief, which they later amended to add claims for damages resulting from an alleged kickback scheme. Certain appellants asserted counterclaims for breach of contract and accounting. The district court granted summary judgment in respondents' favor on all asserted claims and entered judgment against appellants on their counterclaims. This appeal follows. Declaratory relief clairns

Summary judgment decisions and contract interpretation issues are reviewed de novo. Bielar u. Washoe Health Sys., Inc., 129 Nev. 459, 465, 306 P.3d 360, 364 (2013); Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is proper "when the pleadings and other evidence on file demonstrate that no genuine issue as to any material fact remains and that the moving party is entitled to a judgment as a matter of law." Wood, 121 Nev. at 729, 121 P.3d at 1029 (internal quotation marks omitted). The objective of interpreting contracts

"is to discern the intent of the contracting parties." Am. First Fed. Credit Union v. Soro, 131 Nev. 737, 739, 359 P.3d 105, 106 (2015) (internal quotation marks omitted). When the "language of the contract is clear and unambiguous," it "will be enforced as written." Id. (internal quotation marks omitted).

On the first claim for declaratory relief, we perceive no error in the district court's conclusion that the agreements expressly granted respondents the right to terminate the agreements if respondents, in their sole judgment, determined that appellants did not meet the agreements' suitability requirements. It thus follows that the district court did not err

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in declaring that respondents properly terminated the agreements based on Seibel's criminal conviction and failure to disclose it. We are not persuaded by appellants' assertion that they should have been allowed to cure, as the agreements vested respondents with sole discretion to determine whether appellants' unsuitability was incurable. Appellants' evidentiary arguments do not support a different result because they failed to present evidence creating a genuine dispute of fact as to whether a felony conviction, particularly Seibel's admitted and undisclosed one, renders a party unsuitable, making the disputed evidence immaterial to the district court's decision. Wood, 121 Nev. at 729, 121 P.3d at 1029.

As to the second and third declaratory relief claims, we conclude that the district court properly determined that respondents had no ongoing obligations to appellants that survived post-contract termination. The record supports the court's conclusion that appellants materially breached the agreements due to noncompliance with the suitability provisions and that respondents' gaming license responsibilities required suspending the parties' current and future obligations. See Cain u. Price, 134 Nev. 193, 196,

415 P.3d 25, 29 (2018) ("one party's material breach of its promise discharges the non-breaching party's duty"). The agreements do not specify any financial entitlements upon termination due to unsuitability. Additionally, the district court properly determined that sections of the LLTQ and FERG agreement were unenforceable agreements to agree because their material terms were lacking or indefinite as to the timing, location, and costs for any future restaurant project between the parties. See May u. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005) ("A valid contract cannot exist when material terms are lacking or are insufficiently certain and definite."); City of Reno v. Silver State Flying

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Seru., Inc., 84 Nev. 170, 176, 438 P.2d 257, 261 (1968) ("An agreement to agree at a future time is nothing and will not support an action for damages." (citation omitted)). Thus, the district court did not err in entering summary judgment for respondents on their claims for declaratory relief. See Griffin u. Old Republic Ins. Co., 122 Nev. 479, 483, 133 P.3d 251, 254 (2006) (providing that this court will not "attempt to increase the legal obligations of the parties where the parties intentionally limited such obligations" (internal citation omitted)). And because DNT and LLTQ/FERG's counterclaims concern restaurant profits earned after the agreements' termination, their counterclaims are moot and fail as a matter of law.

Daniages claims

Appellants also challenge the summary judgment for

respondents on their damages claims, which included claims for breach of the implied covenant of good faith and fair dealing against the Seibel- affiliated entities and fraudulent concealment against Seibel and appellant Craig Green. These claims alleged that appellants solicited respondents' vendors for kickback payments in exchange for maintaining business relationships or securing favorable treatment. Appellants argue that the agreements do not expressly prohibit them from "doing business with persons involved with the [r]estaurants [i.e., the vendors] absent sharing in the profits of those opportunities with [respondents]." Appellants argue that damages for fraudulent concealment were unsupported because respondents did not prove any of the elements of that claim. We disagree with both contentions.

As to good faith and fair dealing, the evidence, including emails, billing invoices, and Green's interrogatory responses, shows that Seibel and

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Green pressured respondents' vendors, without respondents' knowledge, into paying $326,046.87 in non-contractual kickbacks. The undisclosed kickback arrangement constitutes the kind of arbitrary and unfair conduct the covenant of good faith and fair dealing prohibits, as it was unauthorized under the agreements and jeopardized respondents' standing with gaming authorities. State, Dep't of Transp. u. Eighth Jud. Dist. Ct., 133 Nev. 549, 555, 402 P.3d 677, 683 (2017) (stating that the covenant of good faith and fair dealing "prohibits arbitrary or unfair acts by one party that work to the disadvantage of the other" (quoting Nelson u. Heer, 123 Nev. 217, 226, 163 P.3d 420, 427 (2007))). Appellants liken the kickbacks to "marketing services," but provided no evidence creating a genuine dispute about whether the kickback scheme was permissible, given that the development agreements bind the Seibel-affiliated entities to suitability standards requiring compliance with gaming laws and their Ethics and Compliance Program prohibiting the kickbacks. Wood, 121 Nev. at 731, 121 P.3d at 1030-31 (observing that the non-moving party must "set forth specific facts demonstrating the existence of a genuine factual issue"). Thus, the district court properly concluded that appellants' actions were in bad faith and disregarded their express obligations to conduct themselves with the highest standards. See Hilton Hotels Corp. u. Butch Lewis Prods., Inc., 107 Nev. 226, 234, 808 P.2d 919, 923 (1991) ("When one party performs a contract in a manner that is unfaithful to the purpose of the contract and the justified expectations of the other party are thus denied, damages may be awarded against the party who does not act in good faith."). As to the fraudulent concealment claim, the summary judgment evidence established each element of the claim. Fraudulent concealment requires proof that the defendant intentionally concealed or suppressed a

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material fact they were obligated to disclose with the intent to defraud the plaintiff, the plaintiff was unaware of the fact and would have acted differently had they known, and the plaintiff sustained damages. Leigh- Pink u. Rio Props., LLC, 138 Nev. 530, 533, 512 P.3d 322, 325-26 (2022). First, appellants provided no evidence to challenge respondents' showing that Seibel and Green concealed a material fact by failing to inform respondents about the kickback scheme and by instructing vendors not to disclose their payments to appellants when the agreements required ongoing disclosure of conduct that could impact respondents' gaming license. Second, respondents' Ethics and Compliance Program prohibits kickbacks outside of contracts and respondents would not have permitted such a scheme. Third, the vendors paid over $300,000 in kickbacks because of the scheme, which violated respondents' Ethics and Compliance Program and jeopardized their gaming licensure status. Thus, the evidence, which was not meaningfully refuted, supports the district court's judgment on the fraudulent concealment claim. Because the breach of good faith and fair dealing and fraudulent concealment claims support the damages award, we need not address respondents' other theories for recovering damages for the kickback scheme. See Bingham v. Zolt, 66 F.3d 553, 564 (2d Cir. 1995) (affirming a damages award despite the dismissal of certain claims because each claim presented an alternative theory of liability supporting the damages).

Arnended counterclaims

Appellants contend that the district court erred when it struck their amended counterclaims. A motion for leave to amend under NRCP 15(a) is addressed to the sound discretion of the trial court. Connell v. Carl's Air Conditioning, 97 Nev. 436, 439, 634 P.2d 673, 675 (1981).

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J.

Here, the district court's scheduling order set the deadline to amend pleadings or add parties for February 4, 2019. Notwithstanding that deadline and the district court's initial denial of LLTQ/FERG's motion to amend, appellants added amended counterclaims without seeking leave to explain their untimely conduct. If a party was not diligent in at least attempting to comply with the deadline, the inquiry into whether the filing deadline could be met ends. Nutton v. Sunset Station, Inc., 131 Nev. 279, 287, 357 P.3d 966, 971 (Ct. App. 2015). Thus, the district court did not abuse its discretion when it struck the amended counterclaims. See id. at 289, 357 P.3d at 973 (affirming a district court decision that good cause did not exist under NRCP 16 after .appellant failed to amend their pleading before a scheduling order deadline).

Because appellants have not demonstrated that relief is warranted, we

ORDER the judgment of the district court AFFIRMED. 6,6i >x

Cadish

J.

Lee cc: Hon. Timothy C. Williams, District Judge Bailey Kennedy

Pisanelli Bice, PLLC

Eighth District Court Clerk

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