Vegas South Partners v. Mandalay Place

 by the Nevada Gaming Commission. Based on this investigation, Vegas
South withdrew its liquor license applications and sought to change
ownership. A dispute arose between the parties over whether Vegas
South had breached the leases, which resulted in Vegas South ceasing
operation of the poolside food and beverage venue and a delay in the
opening of the burlesque lounge.
Vegas South commenced the underlying district court actions
seeking, among other things, to prevent Mandalay from terminating the
burlesque lounge lease and to recover damages from Mandalay resulting
from the closure of the poolside food and beverage venue.' The district
court ultimately granted summary judgment in favor of Mandalay and
against Vegas South for breach of the leases. Vegas South appealed. For
the following reasons, we affirm.
Standard of Review
This court reviews a district court's order granting summary
judgment de novo. Francis v. Wynn Las Vegas, 127 Nev. „ 262 P.3d
705, 714 (2011). Summary judgment is proper only when "the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law." NRCP 56(c). "[VV]hen reviewing a motion for summary
judgment, the evidence, and any reasonable inferences drawn from it,
'Vegas South sought damages from Mandalay under the theory of
unjust enrichment. Vegas South claimed that Mandalay appreciated,
accepted, and retained its estimated $450,000 in improvements to the
poolside food and beverage venue, which created an implied contact.
Accordingly, Vegas South argued, it would be inequitable for Mandalay to
retain the benefit of the improvements without payment for their value.
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must be viewed in a light most favorable to the nonmoving party." Wood
v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005).
Under Nevada law, a contract must be read as a whole, giving
meaning to all provisions. Ringle v. Bruton, 120 Nev. 82, 93, 86 P.3d 1032,
1039 (2004). Moreover, this court "construe[s] a contract that is clear on
its face from the written language," and will enforce the contract as
written. State ex rel. Masto v. Second Judicial Dist. Court, 125 Nev. 37,
44, 199 P.3d 828, 832 (2009). Construction of a contract term is a question
of law that this court reviews de novo. Anvui, LLC v. G.L. Dragon, LLC,
123 Nev. 212, 215, 163 P.3d 405, 407 (2007).
Breach for failing to obtain a liquor license
Vegas South argues that the district court erroneously
concluded that it breached the liquor license provision of the Rose Lease.
It argues that any delay in the issuance of the liquor license resulted from
Mandalay's insistence that the parties amend the lease. Neither its
citations nor the record, however, supports this position. Vegas South
withdrew its application voluntarily, likely because it knew that its
principals would not be awarded a license in light of the Prive
investigation. Further, the principals never submitted a subsequent
application. Vegas South cites to Clark County Code of Ordinances §
8.20.030 for the proposition that it needed to withdraw its application to
provide a valid, current lease. However, this provision of the Code does
not require that the application be withdrawn, prohibit supplementation
of the application with the updated lease, or prohibit changes to the
application. Clark Cnty. Code of Ordinances § 8.20.030. More
importantly, Vegas South's argument fails because the Rose Lease was
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still valid, therefore complying with § 8.20.030. Vegas South had no
reason to withdraw the application based on the still-valid lease.
Because Vegas South withdrew its application without
justification, we conclude that it defaulted on the lease. The Rose Lease
required that Vegas South immediately apply for a liquor license and
provided that if Vegas South was "unable to obtain a liquor license or has
its liquor license suspended, limited or revoked, such failure will
constitute an event of default and result in the immediate termination of
this Lease." While there was no deadline set for obtaining the liquor
license, time was clearly of the essence where the lease required an
"immediate" application for the license. Moreover, even if time was not of
the essence, Vegas South could not have performed within a reasonable
time without an application pending. Mayfield v. Koroghli, 124 Nev. 343,
349, 184 P.3d 362, 366 (2008) ("If time is not of the essence, the parties
generally must perform under the contract within a reasonable time,
which depends upon the nature of the contract and the particular
circumstances involved." (footnote and internal quotation omitted)). We
therefore conclude that Vegas South breached this material provision in
the contract. See Covington Bros. v. Valley Plastering, Inc., 93 Nev. 355,
360, 566 P.2d 814, 817 (1977) (stating that anticipatory repudiation of a
contract occurs when one party's nonperformance is "clear, positive, and
unequivocal . . . in light of the total factual context of the individual case."
(citation omitted)); Finnell v. Bromberg, 79 Nev. 211, 225, 381 P.2d 221,
228 (1963) ("Where a party bound by an executory contract repudiates his
obligation before the time for performance, the promisee. . . [may] treat the
contract as ended . . . [and] maintain an action at once for the damages
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occasioned by such anticipatory breach." (emphasis added) (quoting 17
C.J.S. Contracts § 472, at p. 973)).
Breach for failure to pay rent
Vegas South argues that their failure to pay rent did not
constitute a breach of the Rose Lease because Mandalay's general counsel,
William Martin, verbally informed Vegas South that Mandalay did not
expect rent until the parties finalized the Third Amendment to the lease.
We conclude that Vegas South breached the Rose Lease by failing to pay
rent because Mandalay did not waive or modify the rental terms, as
specified in section 27.13(b) of the Rose Lease. In order to effectuate a
modification or waiver of contract terms, section 27.13(b) provides that
"[n]o term . . . required to be performed . . . shall be waived, altered or
modified except by a written instrument executed by the other party."
(Emphasis added.) Under the lease, Mandalay needed to provide a rental
modification or waiver in writing; Martin's verbal statements do not
represent an adequate waiver or modification of the Rose Lease. Further,
any alterations to the Rose Lease terms must have been executed by the
other party. Accordingly, no modification or waiver of the terms of the
Rose Lease could take effect. Because Vegas South did not provide
evidence of a waiver or modification that satisfies the procedure outlined
in Section 27.12(b) of the Rose Lease, their argument fails.
Vegas South also argues that Mandalay cannot recover any
rent accrued after termination of the Rose Lease in December 2009, as
Mandalay did not make an effort to attract replacement tenants. It
argues that Mandalay had a duty to mitigate damages after termination of
the Lease and can therefore only recover rent accrued prior to the
termination of the Rose Lease in December 2009. Regardless of section
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24.2(b)'s terms regarding Vegas South's rent liability after termination of
the Rose Lease, Mandalay only sought past due rent accrued before the
Lease termination in December 2009. Neither party disputes the rental
amounts before the termination of the Lease or that they are still owed.
Accordingly, Vegas South's claim that Mandalay failed to mitigate
damages after December 2009 is irrelevant, and their argument fails
We have considered Vegas South's remaining issues on appeal
and concluded that they are without merit.
Accordingly, we
ORDER the judgment of the district court AFFIRMED.
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cc: Hon. Susan Scann, District Judge
Stephen E. Haberfeld, Settlement Judge
Kolesar & Leatham, Chtd.
Pisanelli Bice, PLLC
Eighth District Court Clerk
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