Summary
In Merrill v. Trump Indiana, Inc., 2002 WL 1307304 (N.D.Ind. 2002), another Indiana district court discussed this legislative silence, particularly whether Indiana recognized a duty on the part of a casino to evict a compulsive gambler.
Summary of this case from Brown v. Argosy Gaming CompanyOpinion
NO. 2:99-CV-292
May 9, 2002
ORDER
This matter is before the Court on: (1) Trump Indiana, Inc.'s, Motion for Summary Judgment, filed on October 1, 2001; (2) Plaintiff's Request to File a Brief Out of Time, filed on January 28, 2002; and (3) Defendant Trump Indiana, Inc.'s Response to Plaintiff's Objections to the Magistrate Judge's Order and Motion to Strike Affidavits and Attachments, filed on January 31, 2002. For the reasons set forth below, Merrill's motion to file a brief out of time is GRANTED. Trump's motion to strike affidavits and attachments is DENIED AS MOOT. Trump's motion for summary judgment is GRANTED.
This case is DISMISSED WITH PREJUDICE. The Clerk is ORDERED to close this case on this Court's docket.
BACKGROUND
According to the third amended complaint, Plaintiff, Mark Merrill (Merrill), checked into an in-patient recovery program for compulsive gamblers operated by the White Oaks Companies of Illinois (the clinic) in October 1996 to be treated for his compulsive gambling behavior. To facilitate the treatment, the clinic contacted Defendant, Trump Indiana, Inc. (Trump), owner of a Northwest Indiana riverboat casino, to determine if Trump would honor a self-eviction request for Merrill regarding Trump's casino. Merrill alleged this contact between the clinic and Trump resulted in the formation of an oral contract whereby Trump agreed to accept and honor Merrill's self-eviction request in exchange for the clinic and its patients publicizing Trump's support for recovering compulsive gamblers. After this alleged oral contract had been entered, Merrill mailed to Trump a self-eviction request containing a photograph of himself and a request to be barred or evicted from Trump's premises if he showed up there. After being released from the clinic, Merrill suffered a relapse and began to gamble again in December 1996. Trump allowed Merrill to enter and gamble in its casino, where Merrill incurred substantial gambling debts.
In his third amended complaint, which Merrill has filed in forma pauperis, Merrill has alleged that Trump's failure to evict him when he returned to Trump's casino after his relapse constitutes actual fraud, constructive fraud, strict liability, breach of an oral contract, breach of a contract as to a third-party beneficiary, intentional and reckless disregard for others' safety, negligence, and breach of the implied covenant of good faith and fair dealing.
Pursuant to the third amended complaint, Trump filed a motion to dismiss as to each of the counts. In this Court's May 1, 2001, order, Counts II and III of the third amended complaint were dismissed. Trump has filed the instant motion requesting summary judgment on the remaining counts of the third amended complaint.
DISCUSSION
The standards that generally govern summary judgment motions are familiar. Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper only if it is demonstrated that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Nebraska v. Wyoming, 507 U.S. 584, 590 (1993); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In other words, the record must reveal that no reasonable jury could find for the nonmovant. Karazanos v. Navistar Int'l Transp. Corp., 948 F.2d 332, 335 (7th Cir. 1991); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). In deciding a motion for summary judgment, a court must view all facts in the light most favorable to the nonmovant. Anderson, 477 U.S. at 255; Nucor Corp. v. Aceros Y Maquilas De Occidente, 28 F.3d 572, 583 (7th Cir. 1994).
The burden is upon the movant to identify those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits," if any, that the movant believes demonstrate an absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once the movant has met this burden, the nonmovant may not rest upon mere allegations but "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Backer v. Tenenbaum-Hill Assocs., Inc., 914 F.2d 107, 110 (7th Cir. 1990); Schroeder v. Lufthansa German Airlines, 875 F.2d 613, 620 (7th Cir. 1989). "Whether a fact is material depends on the substantive law underlying a particular claim and `only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment.'" Walter v. Fiorenzo, 840 F.2d 427, 434 (7th Cir. 1988) (citing Anderson, 477 U.S. at 248).
"[A] party who bears the burden of proof on a particular issue may not rest on its pleading, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial." Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir. 1988) (emphasis in original); see also Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1391 (7th Cir. 1993). Therefore, if a party fails to establish the existence of an essential element on which the party bears the burden of proof at trial, summary judgment will be appropriate. In this situation, there can be "`no genuine issue as to any material fact', since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323.
Where, as here, jurisdiction is premised upon diversity of citizenship, 28 U.S.C. § 1332, the federal district court must apply the substantive law of the forum state. Erie R.R. Co. v. Thompkins, 304 U.S. 64 (1938). In this case, therefore, the law of the State of Indiana is controlling.
Motion to File Brief Out of Time
On December 21, 2001, Magistrate Judge Rodovich gave Merrill up to and including January 21, 2002, in which to file his response to Trump's motion for summary judgment. Merrill claims that due to mail delays, he did not receive the magistrate's order until January 11, 2002. Merrill asserts that despite his best efforts, he was unable to complete the response until January 23, 2002. Subsequently, Merrill's response was filed on January 28, 2002.
As Merrill's response is important to resolving this matter and such delay was minimal, this Court accepts and considers Merrill's tardy response in ruling on the instant motion for summary judgment. Motion for Summary Judgment Fraud
In Count I of the third amended complaint Merrill alleged that agents or employees of Trump knowingly and fraudulently misrepresented facts when Trump entered into an oral contract to evict Merrill from its casino. Merrill asserted that the fraud stemmed from an October 15, 1996, conversation between Lee Lang (Lang), his counselor at the clinic, and Arnie Fleischmann (Fleischmann) of Trump. In that alleged conversation, Merrill asserted that Fleischmann committed fraud when he told Lang that he would accept and honor Merrill's self-eviction notice.
To establish a claim for actual fraud in Indiana, a plaintiff must show: 1) a material misrepresentation of past or existing facts, which; 2) was false; 3) was made with knowledge or reckless ignorance of the falsity; 4) was relied upon by the complaining party; and 5) proximately caused the complaining party's injury. See, e.g., Rice v. Strunk, 670 N.E.2d-1280, 1289 (Ind. 1996).
In the third amended complaint, Merrill successfully alleged that Trump misrepresented its existing corporate policy when it entered into the oral contract with Lang. (Compl. ¶¶ 14-25) Although such an allegation is sufficient to survive a motion to dismiss, mere allegations are insufficient to survive a motion for summary judgment. See Jackson, 176 F.3d at 985.
Plaintiff's fraud claim rests on the alleged oral communication between Lang and a representative of Trump, supposedly Fleischmann. Merrill asserts to have been present during this telephone call, but admitted that he only heard Lang's side of the conversation. (Merrill Dep. at 67) Moreover, Merrill does not even know who Lang was talking to during Lang's conversation with the representative from Trump. (Merrill Dep. at 65-66)
Upon review of the evidence, it is evident that no conversation between Lang and Fleischmann ever took place. (Lang Dep. at 57-60, 83, 96); (Fleischmann Aff. ¶ 3). Lang called Trump only once to ask to whom a letter of self-eviction should be sent. (Lang Dep. at 58-60) During that conversation, no one from Trump ever told Lang about its policies concerning compulsive gambling. (Lang Dep. at 100) Indeed, Merrill now admits that Lang never spoke with Fleischmann at any time concerning a contract. (Pl.'s Stmt. of Gen. Issues, ¶ 1) Furthermore, Merrill concedes that no one from Trump or anyone else has ever told him about Trump's alleged policies concerning compulsive gamblers. (Merrill Dep. at 134, 154)
Accordingly, Trump is correct in the premise that not only has Merrill failed to demonstrate a genuine issue of material fact concerning Trump's alleged misrepresentation, but he has failed to demonstrate any representation at all.
Due to the aforementioned evidence, Merrill asserts that he has "misstated this claim." (Resp. at 5) Indeed, Merrill now admits that Trump did not make any misrepresentations to Lang, but Trump misrepresented to the State of Indiana that it would take measures to prevent a rise in the incidents of compulsive gambling diagnoses. This factual scenario was not pled in Merrill's third amended complaint. Accordingly, Merrill!s new claim is not proper at this time. Makula v. Village of Schiller Park, Ill., 1998 WL 246043, at *5 (N.D. Ill. 1998) ("Summary judgment is not, however, an opportunity for litigants to throw any and all arguments at their opponents — new arguments or old arguments already dismissed."). Furthermore, even if Merrill were able to raise such a claim at this time, this Court finds that the claim is without merit because Merrill does not claim that he knew of or relied on Trump's alleged misrepresentation to the State of Indiana. Rice, 670 N.E.2d at 1289.
Breach of Contract
In Counts IV and V of the third amended complaint, Merrill alleges breach of an oral contract and breach of a third party beneficiary contract. Both counts hinge on the alleged conversation between Lang and a representative from Trump. In the third amended complaint, Merrill asserted that Lang and Fleischmann entered into a contract whereby Fleischmann orally agreed to accept and honor Merrill's self-eviction notice.
As indicated above, the admissible evidence shows that Lang was never given any indication one way or another from any of Trump's representatives whether or not Trump would honor self-eviction requests. (Lang Dep. at 100) Indeed, in his response brief, Merrill admits that "it appears that no contract was formed between Lang and Fleischmann." (Pl.'s Resp. at 8)
Willful and Wanton Misconduct
In Count VI of the third amended complaint, Merrill alleges that "the Defendant's acts and omissions constitute proximate cause by intentionally and recklessly disregarding Plaintiff's safety. . . ." (3rd Am. Compl. ¶ 60) Merrill's alleged claim of intentional and reckless disregard for others' safety is recognized as a cause of action for willful and wanton misconduct.
Willful and wanton misconduct consists of either: 1) an intentional act done with reckless disregard of the natural and probable consequence of injury to a known person under the circumstances known to the actor at the time; or 2) an omission or failure to act when the act has actual knowledge of the natural and probable consequence of injury and has the opportunity to avoid that risk. See, e.g., Witham v. Norfolk W. Ry. Co., 561 N.E.2d 484, 486 (Ind. 1990); United States Auto Club, Inc. v. Smith, 717 N.E.2d 919, 924 (Ind.Ct.App. 1999); Taylor II v. Duke, 713 N.E.2d 877, 882 (Ind.Ct.App. 1999). The two elements of willful and wanton misconduct are: 1) the defendant must have knowledge of an impending danger or consciousness of a course of misconduct calculated to result in probable injury; and 2) the actor's conduct must have exhibited an indifference to the consequences of his conduct. Id.
Willfulness cannot exist without purpose or design. Coop v. Bailey, 502 N.E.2d 116, 118 (Ind.Ct.App. 1986). The Indiana Court of Appeals has stated:
Willful misconduct is something more than negligence. Willful misconduct imports a more positive mental condition prompting an act than does the term wanton misconduct. Willful misconduct implies an intentional deviation from a clear duty or from a definite rule of conduct, a deliberate purpose not to discharge some duty necessary to safety, or purposely doing wrongful acts with knowledge or appreciation of the likelihood of result injury.Hershberger v. Booker, 421 N.E.2d 672, 679 (Ind.Ct.App. 1981).
Merrill contends that Trump acted with willfulness and wantonness by sending him promotions and allowing him to gamble at its casino after Merrill sent Trump a self-eviction notice. However, it has been shown that Trump never represented that it would honor Merrill's self-eviction request. Thus, as it will be discussed in the Negligence section, infra, Trump did not contractually create a duty to evict Merrill. Additionally, as will be illustrated below, Trump had no common law duty to evict Merrill. Therefore, as Trump had no duty to evict Merrill from its casino, allowing him to gamble and sending him solicitations by mail does not constitute willful misconduct. Hershberger, 421 N.E.2d at 679.
Negligence
In Count VII of the third amended complaint, Merrill alleged that because Trump was aware that he was a compulsive/addicted gambler, Trump was negligent in allowing Merrill to gamble at its casino. (3rd Am. Compl. ¶ 62)
To establish a claim for negligence, Merrill must show: 1) a duty on the part of Trump to conform its conduct to a standard of care arising from its relationship with Merrill; 2) a failure on the part of Trump to conform its conduct to the requisite standard of care; and 3) an injury to Merrill proximately caused by the breach. Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind. 1995).
Trump argues that Indiana law does not recognize a duty to honor self-eviction requests or protect an individual from his own gambling addiction. In response, Merrill suggests that Indiana should recognize this duty as a matter of public policy. Trump replies that Indiana has set forth detailed and extensive guidelines for riverboat gaming establishments and that if Indiana had desired to impose liability on casinos for failing to evict compulsive gamblers, it would have already done so.
A federal court sitting in diversity should attempt to determine how the state's highest court would resolve the dispute. Wood v. Allstate Ins. Co., 21 F.3d 741, 743-44 (7th Cir. 1994). While Indiana law is silent as to whether it would recognize a duty on the part of a casino to evict a compulsive gambler, it does recognize that if a contract affirmatively evinces an intent to assume a duty of care, actionable negligence may be based upon the contractual duty. Hale v. R.R. Donnelley Sons, 929 N.E.2d 1025, 1028 (Ind.Ct.App. 2000); Town of Orland v. National Fire Cas. Co., 726 N.E.2d 364, 370-71 (Ind.Ct.App. 2000); Williams v. R. H. Marlin, Inc., 656 N.E.2d 1145, 1155 (Ind.Ct.App. 1995).
In this case, it has been shown that no contract existed between Merrill and Trump. Thus, Trump has not assumed a duty of care based on any contractual duty. Accordingly, Merrill can only prevail on his claim if Indiana law recognizes a duty on the part of a casino to evict a compulsive gambler.
Indiana's legislature has enacted extensive and detailed guidelines for riverboat gaming enterprises. IND. CODE 4-33-1-1, et seq. In addition, the Indiana Administrative Code sets forth an equally extensive set of regulations controlling the gaming industry. IND. ADMIN. CODE tit. 68, r. 1-1-2, et seq. Although Indiana has enacted such extensive legislation, nowhere in any of the aforementioned statutes or regulations does the Indiana legislature impose a duty on casinos to protect gamblers from their own gambling addiction. Because the Indiana legislature has procured such comprehensive statutes and regulations to create and control the riverboat gaming industry, which do not include the duty in question, this Court finds that public policy would not favor imposing a duty on the casino to evict a known compulsive gambler. Hakimoglu v. Trump Taj Mahal Ass'n, 70 F.3d 291, 293 (3d Cir. 1995) (finding extensive state regulation an important factor in determining whether to find additional common law tort liability pursuant to public policy; reasoning that if public policy demanded the imposition of liability, it would have been enacted). As the Indiana courts have never recognized a common law duty in a similar situation, and the Indiana legislature did not wish to create such, this Court finds that pursuant to the facts of this case, Trump had no duty to evict Merrill.
Implied Covenant of Good Faith and Fair Dealing
Count VIII of the third amended complaint alleges a breach of the implied covenant of good faith and fair dealing. Specifically, Merrill alleged that Trump offered him assurances that he would not be allowed to gamble in Trump's casino, which Trump had no intent to honor.
As discussed above, it has been established that no one from Trump or anyone else has ever told Merrill about Trump's alleged policies concerning compulsive gamblers. (Merrill Dep. at 134, 154) It has also been established that there was no contract formed between Lang and Fleischmann to which Merrill could have been a third party beneficiary. (Lang Dep. at 100)
Finding no contract between Merrill and Trump, there can be no breach of the implied covenant of good faith and fair dealing. Weiser v. Godby Bros., Inc., 659 N.E.2d 237, 240 (Ind.Ct.App. 1996) (quoting Restatement 2d of Contracts, § 205 (1981) to the effect that: "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.").
Motion to Strike
Upon review of all the evidence presented, no genuine issue of material fact exists. Accordingly, Trump's motion to strike Merrill's affidavits and attachments is DENIED AS MOOT.
CONCLUSION
For the reasons set forth above, Merrill's motion to file a brief out of time is GRANTED. Trump's motion to strike affidavits and attachments is DENIED AS MOOT. Trump's motion for summary judgment is GRANTED. This case is DISMISSED WITH PREJUDICE. The Clerk is ORDERED to close this case on this Court's docket.