Watchous Enterprises, L.L.C. v. Pacific National Capital et al

Filing 449

MEMORANDUM AND ORDER. Plaintiff's Motion Concerning Form of Judgment (Doc. 445 ) is granted in part and denied in part. The motion is denied only with respect to plaintiff's request for additional injunctive relief. The motion is granted in all other respects, as outlined in this Order. The court directs the Clerk of the Court to issue a Judgment consistent with this Order. Defendant Mark Zouvas's Supplemental Response to Motion Concerning Form of Judgment (Doc. 447 ), which t he court liberally construes as a motion for reconsideration, is denied. Signed by District Judge Daniel D. Crabtree on 9/27/2021. Mailed to pro se parties Pacific National Capital - c/o Charles A. Elfsten at 3300 Irvine Ave. Ste 100, Newport Beach, CA 92660; Waterfall International Holdings Limited, Waterfall Mountain LLC, Waterfall Mountain USA LLC and William J. Mournes at 35 Birch Run Ave. Denville, NJ 07834 and Kendra Duval at 719 W 580 S, Orem, UT 84058-6012 by regular mail. (mam)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
WATCHOUS ENTERPRISES, LLC,
Plaintiff,
v.

Case No. 16-1432-DDC

PACIFIC NATIONAL CAPITAL, et al.,
Defendants.
____________________________________
MEMORANDUM AND ORDER
This Order arises primarily from plaintiff Watchous Enterprises, L.L.C.’s Motion
Concerning Form of Judgment (Doc. 445). The Order also addresses the Supplemental
Response to Motion Concerning Form of Judgment (Doc. 447) filed by defendant Mark Zouvas,
which the court liberally construes as a motion for reconsideration.1 For reasons explained
below, the court grants plaintiff’s motion in part and denies it in part. Defendant Mark Zouvas’s
requested relief—communicated in his Supplemental Response—is denied.
I.

Analysis
A.

Default Judgment Against Pacific National Capital

The court first considers plaintiff’s request for entry of default against defendant Pacific
National Capital on plaintiff’s fraud claim under Kansas common law. As background, this case
involves several corporate defendants and a handful of individual defendants—each of them
related to those corporate outfits. Here, plaintiff has requested entry of default against only

1

Because Mr. Zouvas proceeds pro se in this case, the court construes his filings liberally. The
same is true for all of the individual defendants, each of them proceeding pro se. See Hall v. Bellmon,
935 F.2d 1106, 1110 (10th Cir. 1991). On this approach, Mr. Zouvas’s Supplemental Response (Doc.
447)—despite some irregularities—resembles a motion for reconsideration. The court explains all of this
in more detail in later sections of this Order.

Pacific. That’s because the court already has held the entities associated with the Waterfall
brand in default. See Doc. 82 at 1.
This issue arises—both for Waterfall previously and now for Pacific—because these
corporate entities persistently have proceeded in this case without legal counsel. That’s a
problem. See, e.g., Boilermaker-Blacksmith Nat’l Pension Fund v. Tank Maint. & Tech., Inc.,
No. 96-2161-JWL, 1997 WL 458411, at *1 (D. Kan. July 18, 1997) (“The general rule is that a
corporation can appear in court only by an attorney.” (collecting cases)). For years, in this case,
the court has admonished the corporate defendants to secure counsel or risk the consequences.
See, e.g., Doc. 399 at 1 n.1 (“The defendants know by now that the corporate defendants may not
proceed pro se, neither at trial nor during pretrial proceedings.” (citation omitted)). The court
reminded these pro se corporate defendants in May 2021, for instance, that each “must secure
legal counsel and notify the court at the soonest possible opportunity—and no later than three
weeks before the trial date in this case . . . or suffer the consequences of their failure to oblige
multiple warnings from the court.” Doc. 388 at 3. But the trial date came and passed, and none
of these defendants ever appeared through legal counsel.
Now, plaintiff asks the court to hold Pacific accountable for its failure to secure counsel.
None of the defendants marshaled a response to this argument. This reason alone could justify
the court’s decision to hold Pacific in default. See D. Kan. Rule 7.4(b) (explaining that the court
typically will grant unopposed motions “without further notice”). But plaintiff also is right on
the merits.
“As a general matter, a corporation or other business entity can only appear in court
through an attorney and not through a non-attorney corporate officer appearing pro se.”
Harrison v. Wahatoyas, L.L.C., 253 F.3d 552, 557–58 (10th Cir. 2001) (citation omitted). This

2

rule dates back nearly two centuries. Osborn v. Bank of U.S., 22 U.S. 738, 830 (1824) (Marshall,
C.J.) (“A corporation, it is true, can appear only by attorney, while a natural person may appear
for himself.”). “Dodging that obligation opens a corporation to the possibility of default.”
Zimmerling v. Affinity Fin. Corp, 478 F. App’x 505, 508 (10th Cir. 2012) (citation omitted). Our
Circuit has affirmed default judgments against corporate entities whose failures in litigation stem
from a “deliberate decision not to retain counsel.” Id. (explaining that pro se corporate
defendant’s “lack of notice regarding the default judgment was not due to excusable neglect but
to its deliberate decision not to retain counsel”); see also id. (rejecting defendant’s argument to
the contrary because this assertion “overlook[ed] the deliberateness of [defendant’s] predicate
act: its failure to retain counsel despite adequate warnings of the consequences of doing so”).
Rule 55 of the Federal Rules of Civil Procedure governs default judgments. Fed. R. Civ.
P. 55. Rule 55(a) explains that default may be entered against a party who “has failed to plead or
otherwise defend” an action. Fed. R. Civ. P. 55(a). Rule 55(b)(2) overviews default judgments
entered by courts. Fed. R. Civ. P. 55(b)(2). This subsection explains that courts may enter
default, and, if the party subject to default has appeared in the case, it must receive notice. Id.
Here, Pacific has received notice via plaintiff’s motion.2 See Doc. 445 at 19 (providing a
Certificate of Service asserting that plaintiff served the motion via U.S. mail and electronic mail
to Pacific). And, the court doesn’t need to conduct a hearing on the matter, although Rule 55
permits it. See id. Regardless, “[t]his is not a typical default judgment[.]” Ringgold Corp. v.
Worrall, 880 F.2d 1138, 1141 (9th Cir. 1989).
Here, the situation is analogous to Ringgold, where the Ninth Circuit affirmed default
against defendants who repeatedly disregarded directions from the district court about pertinent
2

Defendants also are on notice because plaintiff raised this point at the beginning of the trial in this

case.

3

details of their lawsuit, particularly an approaching trial date. See id. This case is also similar to
Brock: “In this context, a trial judge, responsible for the orderly and expeditious conduct of
litigation, must have broad latitude to impose the sanction of default for non-attendance
occurring after a trial has begun.” Brock v. Unique Racquetball and Health Clubs, Inc., 786 F.2d
61, 64 (2d Cir. 1986). The trial court held Brock’s defendants in default because they failed to
appear at trial. See id. And, the Second Circuit found “entry of default was . . . appropriate.” Id.
So, for many reasons and with a broad span of support from our Circuit and others, the
court is authorized to hold Pacific in default. Plaintiff’s arguments are directly on point. See
Doc. 445 at 3–4. None of the defendants have argued in response to plaintiff’s points or
authorities. See D. Kan. Rule. 7.4(b). And the court agrees that common sense and centuries-old
precedent support plaintiff’s argument: “entry of default as to Watchous’s claims for fraud is in
order.” Doc. 445 at 4. The court thus grants this aspect of plaintiff’s motion and holds
defendant Pacific National Capital in default.
B.

Appropriate Damages

Next, the court reviews plaintiff’s arguments about an appropriate measure of damages
against the defendants. The jury in this case agreed with plaintiff on all of its claims and
returned verdicts against every individual defendant for:
(1) civil liability under the RICO statute, 18 U.S.C. § 1962(c),
(2) civil RICO conspiracy liability under 18 U.S.C. § 1962(d),
(3) damages due to defendants’ fraud under Kansas common law,
(4) civil conspiracy to commit fraud under Kansas common law, and
(5) punitive damages under Kansas state law.
See Doc. 442 at 1–15. Here’s the issue: a question exists whether any of these damages awards
overlap in a way that’s in tension with the ages-old premise that litigants may not doubly recover
damages. See, e.g., EEOC v. Waffle House, Inc., 534 U.S. 279, 297 (2002) (“As we have noted,

4

it goes without saying that the courts can and should preclude double recovery by an individual.”
(internal quotation marks and citation omitted)). In the court’s view, it can resolve this issue
later when it considers any materials prepared by plaintiff addressing the issue of attorneys’ fees.
Below, the court addresses each form of damages that plaintiff should receive. Then, the court
explains how plaintiff can avoid a double-recovery issue when it provides billing records for its
attorneys’ fees request.
1. Treble Compensatory Damages, Attorneys’ Fees, and Costs Under RICO
Civil RICO liability carries severe penalties. And a jury found that every defendant in
this case violated the RICO statute in two ways: (1) through a direct violation, and (2) through a
civil conspiracy to violate RICO. Here’s what these verdicts mean for plaintiff’s damages
request.
First, the statute’s plain language drafts a clear roadmap for this court. Under the civil
RICO statue: “Any person injured in his business or property by reason of a violation of section
1962 of this chapter . . . shall recover threefold the damages he sustains and the cost of the suit,
including a reasonable attorney’s fee[.]” 18 U.S.C. § 1964(c) (emphasis added). “[T]he
traditional rule [is] that the first step in our exposition of a statute always is to look to the
statute’s text and to stop there if the text fully reveals its meaning.” Wilder v. Va. Hosp. Ass’n,
496 U.S. 498, 526 (1990) (Rehnquist, C.J., dissenting) (citing Am. Tobacco Co. v. Patterson, 456
U.S. 63, 68 (1982) (“[O]ur starting point must be the language employed by Congress, and we
assume that the legislative purpose is expressed by the ordinary meaning of the words used.”
(internal quotation marks and citations omitted))).
Here, the court will stop at step one because the statute’s “text fully reveals its meaning.”
Id. Under the civil RICO statute, plaintiff “shall recover threefold the damages he sustains and

5

the cost of the suit, including a reasonable attorney’s fee[.]” 18 U.S.C. § 1964(c). This damages
award is mandatory. See, e.g., Genty v. Resol. Tr. Corp., 937 F.2d 899, 914 (3d Cir. 1991)
(observing that RICO’s “plain language . . . instructs that injured persons ‘shall recover’ treble
damages and costs and attorneys fees” and remarking that this statutory language connotes a
mandatory provision (quoting 18 U.S.C. § 1964(c))). The court thus grants plaintiff’s motion on
this question because the civil RICO statute mandates treble compensatory damages, attorneys’
fees, and costs.
2. Punitive Damages Under Kansas Common Law
The court now considers plaintiff’s argument that RICO damages don’t affect its
recovery of punitive damages under Kansas common law. Before the trial in this case, the court
already held on motions for summary judgment that the individual defendants are liable for fraud
under Kansas common law. See Doc. 335 at 91. At trial, the jury was asked to decide three
related questions: (1) whether plaintiff sustained damages based on the fraud, (2) whether
defendants conspired to commit fraud, and (3) if a civil fraud conspiracy existed, whether
plaintiff sustained damages as a result. See, e.g., Doc. 442 at 1–3 (providing the Verdict Form
completed by the jury). For each of these questions and against every individual defendant, the
jury returned the same answer: Yes. See id. at 1–15. Last, the jury was asked to answer one
additional question: whether, based on their finding of fraud, punitive damages were warranted.
See, e.g., id. at 3 (providing an example of the relevant question to jurors via the Verdict Form
for each individual defendant). The jury replied in the affirmative. See id. This section of the
court’s Order considers the issue of punitive damages, as decided by the jury’s verdict.

6

Plaintiff and defendants spotlight separate issues in this area. As explained below,
defendants’ arguments are misguided. Plaintiff is correct. And, the court spots an additional
issue that merits discussion.
Starting with defendants, they argue that civil RICO liability shares a punitive dynamic
that’s analogous to plaintiff’s claim for punitive damages under Kansas common law. See Doc.
446 at 1–4. Specifically, they argue, “the punitive nature of treble RICO damages” means the
court should “deny the imposition of punitive damages in a case, like this one, where treble
RICO damages are imposed for the same conduct.” Id. at 1. Defendants urge the court to “strike
all punitive damages against them or, at a minimum,” reduce the punitive damages award to
equal the compensatory damages award. Id. at 12. This argument is misguided for at least two
reasons.
First, the Supreme Court has spoken unequivocally about RICO’s treble damages
provision in a way that forecloses defendants’ argument. See PacifiCare Health Sys., Inc. v.
Book, 538 U.S. 401, 406 (2003) (“Indeed, we have repeatedly acknowledged that the trebledamages provision contained in RICO itself is remedial in nature.”). Thus, RICO’s treble
damages provision isn’t punitive—it’s remedial. See id. Second, the civil RICO claim and state
law fraud claims are not identical. Although the facts of this case necessarily involve
overlapping details, the charges and individual elements aren’t identical. Thus, awarding
damages for unlawful racketeering activity, under RICO, and for fraudulent conduct, under
Kansas common law, doesn’t entail a duplicative damages award. Cf. Mason v. Okla. Turnpike
Auth., 115 F.3d 1442, 1460 (10th Cir. 1997) (“In some cases, multiple punitive damage awards
on overlapping theories of recovery may not be duplicative at all, but may instead represent the

7

jury’s proper effort to punish and deter all the improper conduct underlying the verdict.”
(citation omitted)).3 In sum, none of defendants’ arguments are persuasive.
Defendants argue separately that the court should eliminate the jury’s punitive damages
award, or at least reduce it to equal the compensatory damages in this case. Doc. 446 at 4.
These arguments rely on an analogy to another case from our court, Ross v. Jenkins. See id. at 3
(citing Ross v. Jenkins, 325 F. Supp. 3d 1141, 1110 (D. Kan. 2018)). But all of these arguments
are incorrect.
First, defendants cite Ross for the premise that the court should reduce the jury’s punitive
damages award. Id. But this analogy is misplaced. In Ross, the damages award was decided by
the court—not a jury. See Ross, 325 F. Supp. 3d at 1153. There’s no meaningful comparison
between these cases because their differences are fundamental. Second, defendants raise an
incorrect argument that just like “in Ross, those [compensatory] damages should set the upper
limits of punitive recovery.” Doc. 446 at 4. Here, defendants are right but not in the way they
likely intended. The “upper limit” for punitive damages does depend on the amount of
compensatory damages. But it doesn’t depend on the court’s unrelated conclusions in Ross.
Instead, the Supreme Court has set the outer-most limits for punitive damages awards relative to
compensatory damages awards. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408,
425 (2003) (explaining that “few awards exceeding a single-digit ratio between punitive and
compensatory damages . . . will satisfy due process”). None of the punitive damages awarded in
this case offend the Supreme Court’s instruction.4

3

Mason was overruled on other grounds by TW Telecom Holdings Inc. v. Carolina Internet Ltd.,
661 F.3d 495, 497 (10th Cir. 2011).

4

Nor do the punitive damages awarded in this case conflict with guidance from the Supreme Court
and our Circuit that courts should weigh: (1) the degree of reprehensibility, (2) the disparity between
actual and punitive damages, and (3) comparable cases. See Jones v. United Parcel Serv., Inc., 674 F.3d

8

Plaintiff focuses on a different issue. In plaintiff’s view, RICO’s statutory text provides a
clear answer to the question whether courts may award treble compensatory damages under
RICO and punitive damages under a different law. As our Circuit has observed, the Organized
Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 923 (1970), was intended to strengthen
“legal tools” and enhance “sanctions” through “new remedies” in order “to deal with the
unlawful activities of those engaged in organized crime.” United States v. Hampton, 786 F.2d
977, 980 (10th Cir. 1986) (internal quotation marks, citation, and emphasis omitted). To
plaintiff’s exact point, the Organized Crime Control Act provides that “‘[n]othing in this title
shall supersede any provision of Federal, State, or other law imposing criminal penalties or
affording civil remedies in addition to those provided for in this title.’” Id. (quoting Pub. L. 91452 § 904(b)); see also Doc. 445 at 5 (quoting same).
The Ninth Circuit has put it this way: “Since Congress has spoken clearly on this issue,
. . . [w]e hold that a plaintiff may receive both treble damages under RICO and state law punitive
damages for the same course of conduct.” Neibel v. Trans World Assurance Co., 108 F.3d 1123,
1130–31 (9th Cir. 1997).5 The Sixth Circuit also agrees. See Avery Dennison Corp. v. Four

1187, 1207–08 (10th Cir. 2012) (reviewing and analyzing these factors). First, society has a strong
public interest in punishing and deterring fraudulent conduct because such activities pose an inherent risk
to social and economic stability. Second, and as noted already, the disparity between the compensatory
and punitive damages in this case doesn’t offend Supreme Court precedent. See State Farm Mut. Auto.
Ins. Co., 538 U.S. at 425. Last, the issue of comparable cases emphasizes this question: “whether
[defendants] had reasonable notice” that their unlawful conduct “could result in such a large punitive
award.” Cont’l Trend Res., Inc. v. OXY USA, Inc., 101 F.3d 634, 641 (10th Cir. 1996). Kansas statute,
Kan. Stat. Ann. § 60-3701, authorizes and also limits punitive damages awards. This law’s existence
means that defendants had notice not only about the possibility of a punitive damages award against them,
but even the maximum limits on what a jury could assess. See Paradigm All., Inc. v. Celeritas Techs.,
LLC, 722 F. Supp. 2d 1250, 1278 (D. Kan. 2010) (explaining that where certain state law claims entail a
statutorily created possibility of related punitive damages, defendants were “placed on sufficient notice
that they were subject to exemplary damages for their conduct” (citations omitted)).
5

Neibel was impliedly overruled on other grounds by the Supreme Court’s holding in Salinas v.
United States, 522 U.S. 52, 62 (1997), as discussed by the Ninth Circuit in United States v. Fernandez,
388 F.3d 1199, 1228 (9th Cir. 2004).

9

Pillars Enter. Co., 45 F. App’x 479, 488 (6th Cir. 2002) (quoting Neibel in agreement and
remarking that “Congress intended RICO to impose stringent civil penalties on organized illegal
activity, above and beyond state-law remedies already available”). And the Fifth Circuit has
remarked: “RICO’s statutory language reflects congressional intent to supplement, rather than
supplant, existing crimes and penalties.” United States v. Deshaw, 974 F.2d 667, 671–72 (5th
Cir. 1992) (citation omitted). The court agrees with these cases because RICO’s statutory text
makes clear that its penalty provisions do not come at the cost of other remedies. Cf. Neibel, 108
F.3d at 1131 (“Since Congress has spoken clearly on this issue, we are bound by its wishes.”).
Thus, RICO’s mandatory treble compensatory damages provision does not preclude plaintiff
from securing punitive damages under Kansas common law.
But, there’s one more issue that neither party argues but the court is duty bound to
acknowledge. At trial, the jury was instructed to consider a range of factors in reaching its
determination of a proper punitive damages award. These factors included “the probable
litigation costs incurred by plaintiff.” Doc. 443 at 2. This detail, on its own, doesn’t trouble the
court. But relatedly, plaintiff presented evidence to the jury—during the punitive damages phase
of trial—about the aggregate total cost that plaintiff incurred, including attorneys’ fees.
Plaintiff’s counsel adduced evidence during direct-examination that plaintiff had incurred
approximately $500,00 in attorneys’ fees and other expenses throughout the course of this
litigation. Thus, the jury’s calculus of punitive damages included consideration of attorneys’
fees and costs that plaintiff may seek to recover under RICO. And this issue could produce a
double damages recovery, which the court can’t permit. Thus, the court concludes that (1)
plaintiff is entitled to treble damages under RICO and punitive damages under Kansas common
law, and (2) each defendant is entitled to a credit on the respective punitive damages they owe

10

plaintiff equal in amount to the attorneys’ fees and costs that plaintiff already may recover based
on the jury’s civil RICO verdict. Plaintiff hasn’t yet submitted any documents to support a
precise amount owed for these costs. So, when plaintiff does bring forward these materials, the
court orders plaintiff to calculate and show its work explaining how an award of fees and costs
will avoid double recovery. Plaintiff is directed to consult Rule 54.2 from our court’s Local
Rules, which governs attorney fee awards. See D. Kan. Rule 54.2. And, plaintiff must comply
with this Rule’s requirements. See id. In sum, however, the court agrees with plaintiff and
grants its motion on this question.
3. Survival of Damages Against Defendant Gordon Duval
Next, plaintiff raises a question whether the jury’s award of RICO damages and state law
punitive damages survives the death of defendant Gordon Duval and passes on to his wife,
Kendra Duval, substituted as a party in this case. Defendants haven’t responded to this
argument. For this reason alone, the court could grant plaintiff’s request that these damages
survive Mr. Duval’s passing. See D. Kan. Rule 7.4(b) (explaining that the court typically will
grant unopposed motions “without further notice”). But here again, the court also agrees with
the substance of plaintiff’s arguments.
First, the court agrees with plaintiff’s argument that RICO damages survive the death of
a defendant. The court reaches this conclusion based on the breadth of supporting case law from
around the nation. The Southern District of New York has agreed with this premise more than
once. See Holford USA Ltd. v. Harvey, 169 F.R.D. 41, 43 (S.D.N.Y. 1996) (“A claim survives
the death of a party if the claim is remedial rather than punitive.” (citations omitted)); see also
Epstein v. Epstein, 966 F. Supp. 260, 263 (S.D.N.Y. 1997) (“[S]uch claims survive a party’s
demise, whether the party be a plaintiff, or, as here, a defendant.” (citations omitted)). The

11

District Court for the District of Columbia has reached the same conclusion. See First Am. Corp.
v. Al-Nahyan, 948 F. Supp. 1107, 1122 (D.D.C. 1996) (reviewing RICO’s statutory text, similar
cases, and concluding that “the Court is persuaded that a civil RICO suit survives the death of a
defendant”). Likewise, the Eastern District of Michigan has agreed. See Cnty. of Oakland by
Kuhn v. City of Detroit, 784 F. Supp. 1275, 1285 (E.D. Mich. 1992) (remarking that a cause of
action will survive a defendant’s death when the penalty is remedial rather than punitive and
holding, in agreement with other courts referenced in the opinion, that a plaintiff’s civil RICO
suit, including treble damages, survives a defendant’s death). The Northern District of Indiana
also has confronted this issue and agreed with the rationales discussed, above. See State Farm
Fire & Cas. Co. v. Est. of Caton, 540 F. Supp. 673, 681–82 (N.D. Ind. 1982) (reviewing RICO’s
statutory construction and concluding that a “construction of RICO that permits full survival
against the estate of an alleged wrongdoer is neither absurd nor surprising” (internal quotation
marks and citation omitted)); see also id. at 682 (“To allow organized crime to profit by the
fortuitous death of a principal defendant or alleged wrongdoer at the expense of the injured civil
litigant would subvert the objectives of RICO, making its remedial and deterrent purposes
impotent.”).6
Second, the court agrees with plaintiff that punitive damages under state law also should
survive defendant Duval’s death. Here again, defendants didn’t marshal any opposition. See D.
Kan. Rule 7.4(b). Meanwhile, plaintiff offered thinner arguments—citing just one case from the
Kansas Supreme Court. See Doc. 445 at 8 (citing Alain Ellis Living Tr. v. Harvey D. Ellis Living
Tr., 427 P.3d 9, 23 (Kan. 2018)). But against defendants’ silence, plaintiff’s lone citation offers
persuasive meaning. In Ellis, the Kansas Supreme Court concluded that “a trust and its
6

State Farm Fire & Cas. Co. v. Est. of Caton was overruled on other grounds by Ashland Oil, Inc.
v. Arnett, 656 F. Supp. 950, 953 (N.D. Ind. 1987).

12

beneficiaries with a cause of action for a trustee’s breach of trust and breach of fiduciary duties
may seek punitive damages from the estate of a deceased trustee[.]” Ellis, 427 P.3d at 23. That
case involved a specific statute different from the claims at issue in this case. But the Kansas
Supreme Court’s analysis is instructive. There, the court reviewed nearly identical punitive
damages factors as those presented to the jury in this case. See id. at 19–20. Likewise, the court
addressed with painstaking detail the course of similar cases in other courts, including competing
views, and concluded that punitive damages should survive a defendant’s death. See id. at 22
(“A trustee who believes the malfeasance can go undiscovered indefinitely, or at least until he or
she is no longer alive, would not be restrained if courts could not impose postdeath punitive
damages.”).7
In sum, the court agrees with plaintiff on the merits. The court also notes that defendants
haven’t opposed this line of argument. See D. Kan. Rule 7.4(b). Thus, the court grants
plaintiff’s motion on the issue of RICO damages and punitive damages surviving the death of
defendant Gordon Duval. Mr. Duval’s estate is liable for these damages.
C.

Injunctive Relief

The next issue is plaintiff’s request for injunctive relief. Specifically, plaintiff has asked
the court to “enjoin Defendants from activity similar to that with which Defendants violated
RICO.” Doc. 445 at 8. Plaintiff requests a broad assortment of injunctive relief, ranging from
required dissolution of the defendant corporations to mandating that the individual defendants

7

The Kansas Supreme Court also predicted that its view would still enable juries to factor a party’s
death into its considerations. See id. at 22 (observing that jurors “will know the trustee has died” and
remarking that this detail likely will affect “the weight” of each factor considered by the jury in its
punitive damages award). Indeed, the facts of this case show that the court’s prediction was correct. The
jury in this case awarded a lower amount of punitive damages against the deceased defendant, Gordon
Duval. Compare Doc. 444 at 2 (showing a jury award of $250,000 in punitive damages against Gordon
and Kendra Duval), with Doc. 444 at 3 (showing a jury award of $1,000,000 in punitive damages against
defendant Charles Elfsten).

13

disclose the details of this lawsuit to future business contacts. See id. at 11. And on this front,
defendants have responded with a vigorous defense. See Doc. 446 at 4–12. But neither side’s
arguments merit extensive review for the independent reason that the court, in its discretion,
declines to grant plaintiff’s requested relief.
None of plaintiff’s arguments involve a statutory or jurisprudential mandate. Rather,
these arguments only touch the court’s discretion to impose additional injunctive relief. See,
e.g., Doc. 445 at 8 (“[T]he weight of authority states that a private party has the right to request
the district court to exercise its power under 18 US.C. § 1964(a) to issue an injunction against
Defendants.” (citation omitted)). Here, the court finds that the jury already has determined the
appropriate relief in this case. So, the court needn’t expand on its conclusions by imposing even
more sanctions. The court thus denies plaintiff’s pending motion to the extent it requests
additional injunctive relief against the defendants.
D.

Plaintiff’s Request for Disclosure of Any Attorneys Assisting Defendants

This section of the court’s Order considers plaintiff’s request, raised in its Reply (Doc.
448), that “this [c]ourt should order Defendants to disclose the assistance and identity of” any
attorneys assisting them in drafting recent filings. Id. at 22. As the court has noted repeatedly,
all of the defendants in this case are proceeding pro se. But plaintiff observes that defendants’
recent filings demonstrate a level of legal technicality conjuring a suspicion that these pro se
parties have received undisclosed attorney support. See id. at 21 (“Upon reading Defendants’
recent filings, it is clear to Watchous’ counsel that Defendants have engaged one or more
attorneys to write their briefs for them.”); see also id. at 22 (“Watchous does not believe that any
non-legally trained person would be able to find these authorities, let alone cite them
appropriately.”).

14

Plaintiff cites a case from our Circuit where the court ordered “that any ghostwriting of
an otherwise pro se brief must be acknowledged by the signature of the attorney involved.”
Duran v. Carris, 238 F.3d 1268, 1273 (10th Cir. 2001) (per curiam). In Duran, the court
observed Fed. R. Civ. P. 11’s requirement “that ‘[e]very pleading, written motion, and other
paper shall be signed by at least one attorney of record in the attorney’s individual name, or if the
party is not represented by an attorney, shall be signed by the party.’” Id. at 1271 (quoting Fed.
R. Civ. P. 11(a)). The court’s language was couched to some extent in a way that implicates this
case: “We caution, however, that the mere assistance of drafting, especially before a trial court,
will not totally obviate some kind of lenient treatment due a substantially pro se litigant.” Id. at
1273 (emphasis added). But nevertheless, as just stated, our Circuit held that “any ghostwriting
of an otherwise pro se brief must be acknowledged by the signature of the attorney involved.”
Id. (emphasis added).
This court’s own research reveals that the Circuit has repeated this premise at least once
more. A few months after its decision in Duran, the Tenth Circuit wrote of the same point: “we
have expressed our concern with attorneys who ‘author pleadings and necessarily guide the
course of the litigation with an unseen hand.’” Barnett v. LeMaster, 12 F. App’x 774, 778 (10th
Cir. 2001) (quoting Duran, 238 F.3d at 1271). This “concern stems from the undue advantage
gained when unidentified attorneys author ‘pro se’ pleadings.” Id. The Circuit’s point makes
perfect sense because courts are instructed to “afford a pro se litigant’s pleadings a more liberal
construction than those drafted by an attorney[,]” and “the failure to sign a pleading shields an
attorney from responsibility and accountability for his actions.” Id. (citations omitted). Thus,
our Circuit has held that “the failure of an attorney to acknowledge the giving of advice by

15

signing his name constitutes a misrepresentation to this court by both the litigant and attorney.”
Id. (citation omitted).
Neither of defendants’ latest filings disclose the assistance of legal counsel. And plaintiff
here has argued that the details of each brief all but admit that an attorney has “guide[d] the
course of the litigation with an unseen hand.” Duran, 238 F.3d at 1271 (internal quotation marks
and citation omitted). So, the court must oblige our Circuit’s instruction. And doing so
comports with plaintiff’s argument. Still, this conclusion begs another question—about
enforcement.
The court notes that “Watchous does not request any sanctions for such undisclosed
representation at this time[,]” nor has plaintiff put forth a plan for bringing these details to light
(other than demanding that defendants do so). Doc. 448 at 22. And because plaintiff raised this
argument in its Reply, defendants haven’t had an opportunity to respond to this assertion. So,
while the court agrees with the legal substance of plaintiff’s argument, it declines to endorse
plaintiff’s fundamental assertion—that these pro se defendants actually have received
undisclosed legal assistance. That’s because the issue hasn’t been fully briefed, so the court has
only one side of the story to consider. It’s also because the court, like plaintiff, shares an interest
in finally concluding this years-old lawsuit. See Fed. R. Civ. P. 1.
Likewise, the court can’t decipher a structured suggestion from plaintiff’s arguments
about how its request will mandate a disclosure. Plaintiff here asks the court to order that
defendants disclose the names of any attorneys assisting them. The court grants the request. But
also, the court won’t advocate for plaintiff’s position or investigate these accusations on
plaintiff’s behalf. Thus, the court agrees with plaintiff and orders that defendants comply by

16

disclosing the names of any attorneys providing them legal assistance. Our Circuit requires this
result. Duran, 238 F.3d at 1273.
E.

Appropriate Form of Judgment

Having reviewed prerequisite issues affecting the form of Judgment that will follow from
this Order, the court now considers the parties’ competing views about some of the specific
figures that will comprise the total damages assessment against each defendant.
1. The Appropriate Date for Calculating Interest on Plaintiff’s Damages
One such issue—which the parties dispute—is the appropriate date when any interest
should start to accrue on the damages stemming from defendants’ fraud. Plaintiff argues that
defendants “are liable for prejudgment interest from the date of Watchous’ loss, July 29, 2016,
through the entry of judgment at a rate of 10% per annum” under Kan. Stat. Ann. § 16-201. Doc.
448 at 16. Defendants disagree and argue that the correct date is April 21, 2017. Doc. 446 at 12.
Plaintiff has the better end of this argument. Defendants base their argument on an
earlier Order from this court, entered in November 2017. See id. (citing Doc. 82 at 1). Aside
from predating the trial in this case by more than four years, this Order simply doesn’t apply to
the issue at hand. There, the court awarded damages to plaintiff, but only against the Waterfall
entities based on those companies’ breach of a Settlement Agreement in this case. See Doc. 82
at 1 (explaining that this Order “is limited to Count 1 of the Amended Complaint” which was a
claim “seeking to enforce the Settlement Agreement”). On that issue, the Waterfall defendants
failed to pay the first installment of the agreement, due on April 21, 2017. See Doc. 40 at 6 (First
Am. Compl. ¶ 39) (alleging that a “Settlement” obligated the Waterfall defendants to pay three
installments of $35,000 beginning on April 21, 2017). The Waterfall defendants never paid any
of those installments, hence the court’s Order in November 2017 requiring those defendants to

17

pay the total amount of those installments with interest accruing as of April 21, 2017. See Doc.
82 at 1. Plaintiff is right: defendants’ argument “confuses the issues and differing legal
theories.” Doc. 448 at 15.
“Prejudgment interest on a federal court’s judgment in a diversity case is a matter of state
law.” Macsenti v. Becker, 237 F.3d 1223, 1245 (10th Cir. 2001) (citation omitted). Here, the
court considers the issue of prejudgment interest based not on diversity among the parties, but
rather under its supplemental jurisdiction, via 28 U.S.C. § 1367. Still, the operative premise is
the same: the forum state’s laws apply. And here, the forum state is Kansas. So, the governing
legal rule is this: “A claim becomes liquidated when both the amount due and the date on which
it is due are fixed and certain, or when the same become definitely ascertainable by mathematical
computation.” Plains Res., Inc. v. Gable, 682 P.2d 653, 657 (Kan. 1984). And it’s “irrelevant
that the underlying liability is disputed, so long as the amount of damages is certain.” Green
Constr. Co. v. Kan. Power & Light Co., 1 F.3d 1005, 1010 (10th Cir. 1993) (applying Kan. Stat.
Ann. § 16-201 to claim for prejudgment interest (citation omitted)). In other words, and even
though defendants here still contest their underlying liability, that dispute is of no consequence to
the determination at hand. “The fact that a good faith controversy exists as to whether the
defendant is liable for the money does not preclude a grant of prejudgment interest.” Ireland v.
Dodson, 704 F. Supp. 2d 1128, 1146 (D. Kan. 2010) (citing Crawford v. Prudential Ins. Co., 783
P.2d 900, 909–10 (Kan. 1989)).
The jury now has determined the appropriate amount of damages. The amount therefore
isn’t in dispute. Thus, the proper focus of this determination is “the time of the loss to the
payment of the judgment.” Id. at 1140 (internal quotation marks and citation omitted). And in
this case, the time of the loss was July 29, 2016. That’s when “Watchous had wired Defendants

18

$182,600, which formed the basis of Watchous’ fraud claims.” Doc. 448 at 16. July 29, 2016 is
the appropriate date when interest will begin to accrue on the related damages. In sum, plaintiff
is entitled to the damages deemed due by the jury with prejudgment interest accruing at a rate of
10% per annum beginning July 29, 2016. See Kan. Stat. Ann. § 16-201 (“Creditors shall be
allowed to receive interest at the rate of ten percent per annum . . . for any money after it
becomes due[.]”).
F.

Proper Form of Judgment for Each Defendant

Now, the court must consider and specify the appropriate form of Judgment for each
defendant. The court reaches these considerations because the foregoing analyses all bear upon
the decisions that will follow. Plaintiff’s arguments mainly carry the day and the court will grant
most, but not all, of plaintiff’s requests. First, the court affirms the Judgment already rendered
against the Waterfall defendants, as explained below. Second, the court affirms the jury’s
damages awards against each individual defendant. But as noted already, the court won’t permit
plaintiff to recover attorneys’ fees twice.8 The court will leave this issue to plaintiff for it to
consider when preparing its papers on an attorneys’ fees award complying with our court’s Local
Rules. See D. Kan. Rule 54.2. Third, the court declines plaintiff’s request for sweeping
injunctive relief against the individual defendants. Last, the court agrees with the majority view
that joint and several liability is appropriate for RICO liability and fraud under Kansas common
law. See United States v. Philip Morris USA, Inc., 316 F. Supp. 2d 19, 27 (D.D.C. 2004)
(“Every circuit in the country that has addressed the issue has concluded that the nature of both
civil and criminal RICO offenses requires imposition of joint and several liability because all
defendants participate in the enterprise responsible for the RICO violations.” (citations omitted));
8

Regardless, plaintiff still must provide to the court necessary documentation supporting its costs
and fees. See, e.g., Ross, 325 F. Supp. 3d at 1177–78 (explaining the required procedures for a plaintiff
who seeks an award of attorneys’ fees (citing D. Kan. Rule 54.2)).

19

York v. InTrust Bank, N.A., 962 P.2d 405, 431 (Kan. 1998) (explaining that state law application
of comparative fault doctrine and the related abolition of joint and several liability in Kansas for
negligence actions does not alter the application of joint and several liability “for defendants in
intentional tort actions”). The court identifies its specific conclusions, on a defendant-bydefendant basis, below.9
1. The Waterfall Entities (Waterfall Mountain USA LLC, Waterfall
Mountain LLC, and Waterfall International Holdings Ltd.)
Here, the court adopts fully plaintiff’s request. See Doc. 445 at 10. This determination
isn’t difficult to reach because the issues already were ordained. By the Judgment entered
against the Waterfall entities in November 2017, they already are liable for breaching the
Settlement Agreement in this case. See Doc. 82 at 1. So, the court here holds that the Judgment
stands and it’s up to plaintiff to enforce it against the Waterfall entities.
2. Pacific National Capital
As for the other corporate defendant in this case, Pacific National Capital, the result is
similar. First, and as noted earlier in this Order, the court enters default judgment against Pacific
National Capital based on its failure to secure legal counsel in this litigation and during the trial.
Second, Pacific National Capital is liable to plaintiff for compensatory damages stemming from
its fraudulent conduct for $182,600. This amount does not include, but is subject to,
prejudgment interest at a rate of 10% per annum, under Kan. Stat. Ann. § 16-201, beginning July
29, 2016 until the date of this Order’s entry. Third, Pacific is jointly and severally liable with the
individual defendants (Elfsten, Hasegawa, Mournes, Zouvas, and Duval) for the compensatory
damages awarded on plaintiff’s state law fraud claim, which totals $182,600.
9

Here again, defendants didn’t marshal any meaningful opposition to plaintiff’s request. Instead,
their papers focused on other issues, addressed in earlier sections of this Order. Although the court agrees
with plaintiff on the merits, it also could grant this request because defendants failed to oppose it. See D.
Kan. Rule 7.4(b).

20

3. Charles Elfsten
For defendant Charles Elfsten and the other individual defendants in this case, the court’s
task at this stage essentially is to enforce the jury’s determinations. Based on the jury’s findings
at trial, the following conclusions comprise the Judgment against defendant Elfsten:


Fraud Liability:

Mr. Elfsten is liable to plaintiff for compensatory damages

stemming from his fraudulent conduct. These damages total $182,600. In addition,
prejudgment interest applies to this figure in an amount of 10% per annum,
beginning on July 29, 2016, until the date when Judgment is entered, under Kan.
Stat. Ann. § 16-201.


Civil RICO Liability: Mr. Elfsten also is liable to plaintiff under the jury’s verdict
for civil RICO liability, 18 U.S.C. § 1962(c), for an amount of $365,200, under 18
U.S.C. § 1964(c).

This amount is reduced from $547,800 to reflect RICO’s

mandatory treble damages provision while also eliminating a duplicative
compensatory damages award for the jury’s determination of liability for fraud.10


Attorneys’ Fees and Costs Under RICO: Mr. Elfsten is liable to plaintiff for
attorneys’ fees and litigation costs per the jury’s determination of civil RICO
liability, under 18 U.S.C. § 1964(c). The court can’t determine the amount of this
award currently, however, until plaintiff supplies the necessary documentation and
follows required procedures for a litigant seeking attorneys’ fees under D. Kan. Rule
54.2.



Joint and Several Liability: Mr. Elsten is jointly and severally liable for these
damages alongside the other defendants in this lawsuit.



Punitive Damages: Mr. Elfsten is liable for the jury’s punitive damages award
against him, totaling $1,000,000. He is solely liable for this amount. However, and
as noted by the court in an earlier section of this Order, defendant is entitled to a
credit on this punitive damages amount equal to the attorneys’ fees and costs that

10

Plaintiff recognizes that the jury awarded compensatory damages for the same amount—
$182,600—for both fraud and RICO liability. See Doc. 445 at 10. And, plaintiff suggests that trebled
RICO damages against each defendant be reduced by $182,600 to avoid double-recovery of damages.
See id. The court agrees with plaintiff and adopts its suggestion for each defendant, as this section of the
Order explains. The math is: ($182,600 x 3) = $547,800 - $182,600 = $365,200.

21

plaintiff already will recover based on the jury’s civil RICO verdict. This issue
arises because the jury also considered litigation costs (including attorneys’ fees)
when determining this punitive damages award.
4. Mark Hasegawa
The form of Judgment against Mr. Hasegawa also tracks the jury’s determinations at trial.
Here, the appropriate form of Judgment is as follows:


Fraud Liability: Mr. Hasegawa is liable to plaintiff under the jury’s determination
of fraud liability for compensatory damages totaling $182,600. This figure is
subject to prejudgment interest which accrues at a rate of 10% per annum, under
Kan. Stat. Ann. § 16-201, from July 29, 2016, until the Judgment is entered.



Civil RICO Liability: Mr. Hasegawa is subject to RICO’s mandatory damages
provisions, under 18 U.S.C. § 1964(c), for the jury’s determination that he violated
the civil RICO statute, 18 U.S.C. § 1962(c). This damages award totals $365,200,
which is reduced from $547,800 to eliminate duplicative recovery of compensatory
damages under plaintiff’s fraud claim.



Attorneys’ Fees and Costs Under RICO: Mr. Hasegawa is liable to plaintiff for
attorneys’ fees and litigation costs per the jury’s determination of civil RICO
liability, under 18 U.S.C. § 1964(c). The court can’t determine the amount of this
award currently, however, until plaintiff supplies the necessary documentation and
follows required procedures for a litigant seeking attorneys’ fees under D. Kan. Rule
54.2.



Joint and Several Liability: Mr. Hasegawa is jointly and severally liable for these
damages alongside the other defendants in this lawsuit.



Punitive Damages: Mr. Hasegawa is liable to plaintiff for the jury’s award of
$500,000 in punitive damages against him. Mr. Hasegawa is solely liable for this
amount. However, and as noted by the court in an earlier section of this Order,
defendant is entitled to a credit on this punitive damages amount equal to the
attorneys’ fees and costs that plaintiff already will recover based on the jury’s civil
RICO verdict. This issue arises because the jury also considered litigation costs
(including attorneys’ fees) when determining this punitive damages award.
22

5. William Mournes
As with the other individual defendants, the court’s task with respect to defendant
William Mournes is to effectuate the jury’s verdict. Accordingly, the Judgment against Mr.
Mournes consists of the following:


Fraud Liability: Under the jury’s verdict in this case, Mr. Mournes is liable for
defrauding plaintiff. Accordingly, and as the jury decided, Mr. Mournes is liable to
plaintiff for compensatory damages on this count for $182,600. This amount is
subject to prejudgment interest which accrues at a rate of 10% per annum, under
Kan. Stat. Ann. § 16-201, beginning July 29, 2016, until the Judgment is entered.



Civil RICO Liability: The jury found for plaintiff on the civil RICO claim against
Mr. Mournes, under 18 U.S.C. § 1962(c). So, 18 U.S.C. § 1964(c) requires that he
pay the mandatory damages provided under the civil RICO statute. These damages
total $365,200, which is reduced from $547,800 to eliminate duplicative damages in
light of the compensatory damages that are awarded in this case for fraud.



Attorneys’ Fees and Costs Under RICO: Mr. Mournes is liable to plaintiff for
attorneys’ fees and litigation costs per the jury’s determination of civil RICO
liability, under 18 U.S.C. § 1964(c). The court can’t determine the amount of this
award currently, however, until plaintiff supplies the necessary documentation and
follows required procedures for a litigant seeking attorneys’ fees under D. Kan. Rule
54.2.



Joint and Several Liability: Mr. Mournes is jointly and severally liable with the
other defendants for the damages described above.



Punitive Damages: Mr. Mournes is solely liable for the punitive damages award
against him, as determined by the jury. This award totals $1,000,000. However,
and as noted by the court in an earlier section of this Order, defendant is entitled to a
credit on this punitive damages amount equal to the attorneys’ fees and costs that
plaintiff already will recover based on the jury’s civil RICO verdict. This issue
arises because the jury also considered litigation costs (including attorneys’ fees)
when determining this punitive damages award.

23

6. Mark Zouvas
Here again, the court’s task in determining the appropriate form of Judgment for
defendant Mark Zouvas tracks the jury’s determinations at trial. The Judgment against Mr.
Zouvas—as determined by the jury—is as follows:


Fraud Liability:

Mr. Zouvas was found liable by the jury in this case for

defrauding plaintiff. The jury likewise determined that Mr. Zouvas is liable to
plaintiff for compensatory damages stemming from this conduct, which total
$182,600. This award is subject to prejudgment interest, under Kan. Stat. Ann. §
16-201, at a rate of 10% per annum beginning July 29, 2016, until the entry of
Judgment.


Civil RICO Liability: The jury determined that Mr. Zouvas violated the civil
RICO statute, 18 U.S.C. § 1962(c).

Thus, Mr. Zouvas is subject to RICO’s

mandatory damages provisions, explained in 18 U.S.C. § 1964(c). In total, Mr.
Zouvas therefore owes plaintiff $365,200, which is reduced from $547,800 to
eliminate a duplicative damages award in light of the jury’s verdict regarding
compensatory damages for fraud.


Attorneys’ Fees and Costs Under RICO: The jury’s RICO verdict against Mr.
Zouvas also means that he is obligated to pay attorneys’ fees and costs to plaintiff,
under 18 U.S.C. § 1964(c). The court can’t determine the amount of this award
currently, however, until plaintiff supplies the necessary documentation and follows
required procedures for a litigant seeking attorneys’ fees under D. Kan. Rule 54.2.



Joint and Several Liability: Mr. Zouvas is jointly and severally liable with the
other defendants in this case for the damages described above.



Punitive Damages: The jury in this case determined that Mr. Zouvas is liable to
plaintiff for $500,000 in punitive damages. Mr. Zouvas is solely liable to plaintiff
for this amount. However, and as noted by the court in an earlier section of this
Order, defendant is entitled to a credit on this punitive damages amount equal to the
attorneys’ fees and costs that plaintiff already will recover based on the jury’s civil
RICO verdict. This issue arises because the jury also considered litigation costs
(including attorneys’ fees) when determining this punitive damages award.
24

7. Kendra Duval, as Personal Representative of the Estate of Gordon Duval
The court already determined in this Order that the jury’s verdicts against Kendra Duval,
as personal representative for the Estate of Gordon Duval, survive Mr. Duval’s death.
Accordingly, and like the other individual defendants, the jury’s determinations guide the
appropriate form of Judgment in this case. These determinations are:


Fraud Liability: The jury found in plaintiff’s favor on the claim that Mrs. Duval,
as personal representative for the Estate of Gordon Duval, is liable for defrauding
plaintiff. The jury determined that a compensatory damages award of $182,600 is
therefore due to plaintiff. This amount is subject to prejudgment interest, under
Kan. Stat. Ann. § 16-201, accruing at a rate of 10% per annum beginning July 29,
2016, until the entry of Judgment.



Civil RICO Liability: The jury found in plaintiff’s favor on the claim that Gordon
Duval violated the civil RICO statute, 18 U.S.C. § 1962(c).

Accordingly, a

statutorily mandated damages award, under 18 U.S.C. § 1964(c), is due to plaintiff.
This amount totals $365,200, which is reduced from $547,800 to eliminate
duplicative damages awards in light of the jury’s determination that compensatory
fraud damages also are due in this case.


Attorneys’ Fees and Costs Under RICO: The civil RICO statute also mandates,
under 18 U.S.C. § 1964(c), that Mrs. Duval is liable for attorneys’ fees and costs.
The court can’t determine the amount of this award currently, however, until
plaintiff supplies the necessary documentation and follows required procedures for a
litigant seeking attorneys’ fees under D. Kan. Rule 54.2.



Joint and Several Liability: The Estate of Gordon Duval is jointly and severally
liable with the other defendants in this case for the damages described above.



Punitive Damages: Mr. Duval’s Estate is solely liable for the punitive damages
award determined by the jury. That award totals $250,000. However, and as noted
in an earlier section of this Order, defendant is entitled to a credit on this punitive
damages amount equal to the attorneys’ fees and costs that plaintiff already will
recover based on the jury’s civil RICO verdict. This issue arises because the jury
25

also considered litigation costs (including attorneys’ fees) when determining this
punitive damages award.
G.

Defendant Mark Zouvas’s Motion to Reconsider (Doc. 447)

There’s one more issue to address in this case. After plaintiff filed its pending motion,
but before plaintiff filed its Reply, defendant Mark Zouvas submitted a Supplemental Response
to Motion Concerning Form of Judgment (Doc. 447). Mr. Zouvas also is a signatory on the
individual defendants’ joint Response to Motion Concerning Form of Judgment (Doc. 446). So,
his Supplemental Response constitutes a standalone filing. And because of this sequence of
events, plaintiff’s Reply also touches the issues argued in Mr. Zouvas’s Supplemental Response.
This filing asks the court essentially to relitigate the entire lawsuit—or at least the claims
brought against Mr. Zouvas at summary judgment and since then. See Doc. 447 at 13 (arguing
that the court should vacate its Order on summary judgment in this case and “order a new trial”).
Mr. Zouvas argues for this outcome because he alleges the court here “has made a manifest error
of law in assessing damages for breach of contract and fraud.” Id. at 1. Likewise, he argues the
court “also made a manifest error of law and fact” when granting summary judgment for plaintiff
on the fraud claim. Id. Last, Mr. Zouvas contends that “there exists new evidence not
previously available” to him in this case. Id.
Because Mr. Zouvas proceeds pro se, the court affords a liberal construction to his
filings. See Hall, 935 F.2d at 1110. On this approach, Mr. Zouvas’s Supplemental Response
most closely resembles a motion for reconsideration of the court’s Order on the parties’ motions
for summary judgment (Doc. 335). The court thus construes it as a motion for reconsideration,
and, below, explains a few important aspects of how such motions are resolved.

26

1. Legal Standards for Motions to Reconsider
There’s more than one governing legal standard for motions to reconsider. That’s
because the local procedures guiding a court’s analysis depend on whether the order in question
is one deemed “dispositive” or “non-dispositive.” The Supplemental Response overlooks any
discussion of legal standards, even generally. Nevertheless, the court reviews them here. But
first, the court notes one jurisprudential wrinkle, even though it won’t affect the outcome at hand.
“Some uncertainty exists” under our court’s Local Rules “whether orders disposing of
some but not all claims are dispositive or non-dispositive[.]” Turner v. Nat’l Council of State
Bds. of Nursing, Inc., No. 11-2059-KHV, 2013 WL 139750 at *1 (D. Kan. Jan. 10, 2013)
(citations omitted). Here, the Order on summary judgment didn’t resolve every issue in the case.
The next section of this Order explains why Mr. Zouvas comes up short of sufficiency under any
governing legal standard. In other words, it doesn’t matter whether the court construes the Order
at issue as dispositive or non-dispositive because all of the governing legal frameworks lead to
the same conclusion: Mr. Zouvas’s motion isn’t sufficient, and the court thus denies it.
a. Legal Standard for Motions to Reconsider Non-Dispositive Orders
Our court’s Local Rules provide a basic framework for revolving motions to reconsider
non-dispositive orders. “A party may file a motion asking a judge or magistrate judge to
reconsider an order or decision made by that judge or magistrate judge.” D. Kan. Rule 7.3. For
non-dispositive orders, “[p]arties seeking reconsideration . . . must file a motion within 14 days
after the order is filed unless the court extends the time.” D. Kan. Rule 7.3(b). The motion for
reconsideration must address: “(1) an intervening change in controlling law; (2) the availability
of new evidence; or (3) the need to correct clear error or prevent manifest injustice.”11 Id. To
11

Our Circuit has described “clear error of judgment” to mean that a district court’s decision was
“arbitrary, capricious, whimsical, or manifestly unreasonable[.]” Wright ex rel. Tr. Co. of Kan. v. Abbott

27

make a long story shorter: “D. Kan. Rule 7.3(b) governs motions to reconsider non-dispositive
orders[.]” Skepnek v. Roper & Twardowsky, LLC, No. 11-4102-KHV, 2012 WL 5907461, at *1
(D. Kan. Nov. 26, 2012) (citations omitted).
“A motion to reconsider is only appropriate where the Court has obviously
misapprehended a party’s position, the facts or applicable law, or where the party produces new
evidence that it could not have obtained earlier through the exercise of due diligence.” Id.; see
also Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). In other words, a
party can’t file a motion for reconsideration just to ask for a second bite of the same apple. See
Skepnek, 2012 WL 5907461, at *1 (“A motion to reconsider is not a second opportunity for the
losing party to make its strongest case, to rehash arguments or to dress up arguments that
previously failed.” (citation omitted)); see also Coffeyville Res. Refin. & Mktg., LLC v. Liberty
Surplus Ins. Corp., 748 F. Supp. 2d 1261, 1264 (D. Kan. 2010) (“A motion to reconsider is
available when the court has misapprehended the facts, a party’s position, or the controlling law,
but it is not appropriate to revisit issues already addressed or to advance arguments that could
have been raised in prior briefing.” (citing Servants of the Paraclete, 204 F.3d at 1012)). Finally,
“[w]hether to grant a motion to reconsider is left to the Court’s discretion.” Skepnek, 2012 WL
5907461, at *1.
b. Legal Standards for Motions to Reconsider Dispositive Orders
When courts consider motions to reconsider dispositive orders, the Federal Rules of Civil
Procedure provide the governing legal guide. See D. Kan. Rule 7.3(a). Specifically, Fed. R. Civ.
P. 59 and 60 explain what’s required for a viable motion to reconsider a dispositive order. See

Lab’ys, Inc., 259 F.3d 1226, 1235–36 (10th Cir. 2001) (internal quotation marks and citations omitted).
And, our court has described the term “manifest injustice . . . to mean direct, obvious, and observable
error.” Hadley v. Hays Med. Ctr., No. 14-1055-KHV, 2017 WL 748129, at *2 (D. Kan. Feb. 27, 2017)
(internal quotation marks and citations omitted).

28

Turner, 2013 WL 139750, at *1 (“Rules 59 and 60 apply only to final orders and judgments that
adjudicate all of the parties’ remaining rights and liabilities.” (citations omitted)).
Rule 59 permits a litigant to seek a new trial, alteration, or amendment of a judgment.
Fed. R. Civ. P. 59. Motions raised under this Rule must arrive to the court “no later than 28 days
after the entry of judgment.” Fed. R. Civ. P. 59(b). Timely motions arising after a jury trial also
must specify “any reason for which a new trial has heretofore been granted in an action at law in
federal court[.]” Fed. R. Civ. P. 59(a)(1)(A). Alternatively, a litigant may seek a new trial after
a nonjury trial “for any reason for which a rehearing has heretofore been granted in a suit in
equity in federal court[.]” Fed. R. Civ. P. 59(a)(1)(B). Last, Rule 59 contemplates motions to
amend or alter judgments. In this context, there’s a time limit. “A motion to alter or amend a
judgment must be filed no later than 28 days after the entry of the judgment.” Fed. R. Civ. P.
59(e).
A litigant’s other option is Rule 60. That Rule contemplates scenarios involving a
request for relief from a judgment or an order. See Fed. R. Civ. P. 60. There’s a time limit under
this Rule, too. “A motion under Rule 60(b) must be made within a reasonable time—and for
reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date
of the proceeding.” Fed. R. Civ. P. 60(c)(1). The “reasons” described by this limitation are as
follows. Reason one is “mistake, inadvertence, surprise, or excusable neglect[.]” Fed. R. Civ. P.
60(b)(1). Reason two is “newly discovered evidence that, with reasonable diligence, could not
have been discovered in time to move for a new trial under Rule 59(b)[.]” Fed. R. Civ. P.
60(b)(2). And reason three is “fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party[.]” Fed. R. Civ. P. 60(b)(3). There’s
three other qualifying reasons why a litigant might have a viable motion to reconsider under Rule

29

60. Reason four is that “the judgment is void[.]” Fed. R. Civ. P. 60(b)(4). Reason five is that
“the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that
has been reversed or vacated; or applying it prospectively is not longer equitable[.]” Fed. R. Civ.
P. 60(b)(5). Last, reason six provides a catch-all: “any other reason that justifies relief.” Fed. R.
Civ. P. 60(b)(6).
2. The Supplemental Response is Deficient Under the Governing Legal
Standard for Non-Dispositive Orders
Here, the Order on summary judgment didn’t dispose of every party or claim. See Doc.
335 at 91 (disposing of some but not all claims raised at the summary judgment stage of this
case). Some courts have held that this scenario therefore involves a non-dispositive Order. See,
e.g., Coffeyville Res. Refin. & Mktg., LLC, 748 F. Supp. 2d at 1264 (holding that a court should
analyze an order on partial summary judgment under D. Kan. Rule 7.3(b) because the court’s
holding didn’t determine every claim in the case). Below, the court analyzes Mr. Zouvas’s
Supplemental Response under our court’s Local Rules for motions to reconsider non-dispositive
orders.
On this approach, Mr. Zouvas’s request is time-barred. Our court’s Local Rules state a
firm requirement that “[p]arties seeking reconsideration . . . must file a motion within 14 days
after the order is filed unless the court extends the time.” D. Kan. Rule 7.3(b) (emphasis added).
Mr. Zouvas didn’t request nor did the court grant any extensions of time. The court entered the
Order on summary judgment 500 days before Mr. Zouvas filed his Supplemental Response.
Compare Doc. 335 at 92 (showing that the court entered the summary judgment Order on March
13, 2020), with Doc. 447 at 15 (showing that defendant filed his Supplemental Response on July
26, 2021). Thus, the ship sailed long ago and Mr. Zouvas may not pursue reconsideration of the
court’s Order under D. Kan. Rule 7.3(b).
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3. The Supplemental Response is Deficient Under the Governing Legal
Standards for Dispositive Orders
The court now reviews Mr. Zouvas’s Supplemental Response under the governing
frameworks for motions to reconsider dispositive orders. The outcome doesn’t change. Under
Rule 59, this request is again time-barred. That’s because a motion to reconsider a dispositive
order brought under Rule 59 must arise “no later than 28 days after the entry of judgment.” Fed.
R. Civ. P. 59(b). As the court just noted, Mr. Zouvas waited more than a year to argue that the
court erred when ruling the summary judgment motions. He now can’t try for a second go at this
litigation when the route for doing so was closed on April 10, 2020—“28 days after the entry of
[the] judgment.”12 Id.
This outcome leaves just one other avenue for Mr. Zouvas: Rule 60. But here again he’s
many days late. First, the Supplemental Response fails to address any legal standards
whatsoever, so the court must guess which criteria from Rule 60 he aims to invoke. Second,
reasons one, two, and three all have a time limit: “for reasons (1), (2), and (3)[,]” the motion
must arise “no more than a year after the entry of the judgment or order[.]” Fed. R. Civ. P.
60(c)(1). The Supplemental Response discusses arguments that might fit within these
frameworks—supposed errors of fact and law and newly discovered evidence. See Doc. 447 at
1. But all of these arguments are barred for arriving far too late under Rule 60.13 Even if the

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For another matter, Rule 59 contemplates judgments, but that Rule never mentions orders. Here,
the Order on Summary Judgment (Doc. 335) didn’t include a Judgment. So, the court also could deny the
request for the independent reason that Rule 59 doesn’t apply to this case’s context. Mr. Zouvas’s
Supplemental Response fails to identify any governing legal standards, so the court’s effort here is aimed
toward an exhaustive review of every possible avenue, even though this one might not even apply.

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Also, it’s worth noting that the Supplemental Response raises arguments and then fails to support
them. For instance, Mr. Zouvas contends that “there exists new evidence not previously available.” Doc.
447 at 1. The court has reviewed his filing diligently. But the court can’t find even one example of
newly discovered evidence of any kind. The court can’t accept mere labels and conclusory assertions, not
even generally. The spirit of this concern rings particularly true in this case because Mr. Zouvas now asks

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court couched his arguments under reasons 4, 5, or 6—the categories that don’t have a one year
time limit—the court can’t agree that the “motion under Rule 60(b) [was] made within a
reasonable time[.]” Fed. R. Civ. P. 60(c)(1). So here too Mr. Zouvas’s Supplemental Response
is deficient. Last, the court is mindful of our Circuit’s directive that “relief under Rule 60(b) is
extraordinary and may only be granted in exceptional circumstances.” Stubblefield v. Windsor
Cap. Grp., 74 F.3d 990, 994 (10th Cir. 1996) (internal quotation marks, alteration, and citation
omitted).
This case is exceptional only in the sense that it has dragged on longer than it should’ve.
But Mr. Zouvas’s Supplemental Response is not “extraordinary” or “exceptional[.]” Id. He
failed to raise winning arguments at summary judgment, and then later at trial. Now, he
seemingly would like to start over. That isn’t fair, sensible, or permitted. Cf. Fed. R. Civ. P. 1
(instructing that courts should apply the Federal Rules of Civil Procedure “to secure the just,
speedy, and inexpensive determination of every action and proceeding”). Most of all, that’s not
how the Rules work for a motion to reconsider. See Skepnek, 2012 WL 5907461, at *1 (“A
motion to reconsider is not a second opportunity for the losing party to make its strongest case, to
rehash arguments or to dress up arguments that previously failed.” (citation omitted)); see also
Coffeyville Res. Refin. & Mktg., LLC, 748 F. Supp. 2d at 1264 (“A motion to reconsider is
available when the court has misapprehended the facts, a party’s position, or the controlling law,
but it is not appropriate to revisit issues already addressed or to advance arguments that could
have been raised in prior briefing.” (citing Servants of the Paraclete, 204 F.3d at 1012)).
In sum, the court denies the Supplemental Response (Doc. 447) for at least two reasons.
The arguments are time barred regardless of which governing legal standard applies. And, the
to redo the entire case despite years of delay, opportunities to argue his case, and extensive litigation on
the merits.

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Supplemental Response conflicts with the foundational premise that such motions aren’t
“appropriate to revisit issues already addressed or advance arguments that could have been raised
in prior briefing.” Ferluga v. Eickhoff, 236 F.R.D. 546, 549 (D. Kan. 2006) (citation omitted).
The court thus denies the Supplemental Response (Doc. 447), which the court liberally construes
as a motion for reconsideration.
II.

Conclusion
Plaintiff initiated this lawsuit nearly five years ago. See Doc. 1 (Compl.). Since then,

plaintiff and the court have confronted delay tactics implemented by defendants. The court
issued sanctions in July 2018, for instance, because defendants refused to comply with discovery
proceedings. See Doc. 164. Most recently, defendants pulled a proverbial “Hail Mary pass”
trying to delay the trial. See Doc. 429 at 1 (“[T]he trial in this case already has been delayed
almost to a point of absurdity.” (citing Docs. 261, 271, 361, 369, 373, 375)). The court even has
described “the defendants’ history of hiring and firing multiple sets of attorneys” through “a
deliberate pattern of obstruction and avoidance.” Doc. 375 at 3 (internal quotation marks and
citation omitted).
And still today, these defendants ask the court to delay the effect of the inevitable—a
jury’s rightful findings—by overlooking Supreme Court precedent, disregarding plain statutory
language from Congress, and even relitigating the merits of the entire lawsuit. The court won’t
do that. A jury found defendants liable and now defendants must be held accountable for the
jury’s findings. Plaintiff’s Motion Concerning Form of Judgment (Doc. 445) asks for precisely
as much. The court thus grants plaintiff’s motion in part and denies it in part.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiff’s Motion
Concerning Form of Judgment (Doc. 445) is granted in part and denied in part. The motion is

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denied only with respect to plaintiff’s request for additional injunctive relief. The motion is
granted in all other respects, as outlined in this Order. The court directs the Clerk of the Court to
issue a Judgment consistent with this Order.
IT IF FURTHER ORDERED BY THE COURT THAT defendant Mark Zouvas’s
Supplemental Response to Motion Concerning Form of Judgment (Doc. 447), which the court
liberally construes as a motion for reconsideration, is denied.
IT IS SO ORDERED.
Dated this 27th day of September, 2021, at Kansas City, Kansas.
s/ Daniel D. Crabtree
Daniel D. Crabtree
United States District Judge

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