Williamson v. Gunvalson et al
Filing
234
ORDER denying 226 Motion for Attorneys Fees; 227 Motion to Amend Judgment; 228 Motion for Default Judgment; 229 Motion for Default Judgment; and 231 Motion for Default Judgment. Signed by Judge Jennifer A. Dorsey on 1/6/2022. (Copies have been distributed pursuant to the NEF - DRS)
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 1 of 8
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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4 Robert Williamson, III and Vicki’s Vodka,
LLC,
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Plaintiffs
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v.
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Victoria L. Gunvalson, et al.,
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Defendants
9
10
Case No.: 2:13-cv-01019-JAD-EJY
Order Denying Post-trial Motions
[ECF Nos. 226, 227, 228, 229, 231]
For eight years, Robert Williamson, Victoria “Vicki” Gunvalson, Michael Nicholson, and
11 their respective romantic partners and companies battled over the fallout of failed spirits
12 company Vicki’s Vodka, LLC. When the bench trial began last summer, the case had been
13 narrowed to Williamson’s and Vicki’s Vodka’s claims against Gunvalson and Nicholson, as
14 defaults had been entered against Gunvalson’s Woo Hoo Productions, LLC entity; Nicholson’s
15 company Cougar Juice Vodka, LLC; and Sweetwaters Distillers, Inc., which was the vodka
16 distillery that Nicholson used to manufacture his vodka recipe. 1 After five days of testimony and
17 reviewing the parties’ exhibits and briefing, I found that Williamson and Vicki’s Vodka had
18 failed to prove any of their claims or damages, so I entered judgment in favor of Gunvalson and
19 Nicholson and against the plaintiffs. 2
20
Gunvalson and Nicholson move for an award of attorney’s fees under the Nevada statute
21 that permits such awards for prevailing parties who recover less than $20,000. But because that
22
1
ECF No. 161 (Cougar Juice default); ECF No. 213 (Woo Hoo default); ECF No. 10 in
23 consolidated case 2:13-cv-2022-JAD-EJY (Sweetwaters default).
2
ECF No. 224 (findings of fact, conclusions of law, and judgment).
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 2 of 8
1 statute only applies to litigants who recovered some monetary award, and Gunvalson and
2 Nicholson did not, their request fails. In an effort to distill some monetary benefit from this
3 lengthy litigation, Williamson and Vicki’s Vodka move for default judgments against Woo Hoo,
4 Cougar Juice, and Sweetwaters, and they ask me to reconsider the trial evidence of Williamson’s
5 damages, which they contend support default judgments of hundreds of thousands of dollars.
6 Because I find that the well-pled allegations against the defaulting defendants fall far short of
7 stating any viable claim against them, and because the damages evidence is no more persuasive
8 today than it was when I rejected it at trial, I deny the motions.
9 I.
10
Defendants’ Motion for Attorney’s Fees [ECF No. 226]
Gunvalson, Nicholson, Woo Hoo, and Cougar Juice move for an award of attorney’s fees
11 and costs exclusively under Nevada Revised Statute (NRS) 18.010(2) “since they were the
12 prevailing parties in the litigation and did not recover more than $20,000.” 3 But Woo Hoo and
13 Cougar Juice were not prevailing parties in the litigation—they did not participate in the trial
14 because default was entered against them before it began. 4 And although Gunvalson and
15 Nicholson did prevail at trial, they didn’t do so in a way that triggers NRS 18.010(2). That
16 statute allows the court to award fees when the claimant recovers a money judgment of less than
17 $20,000, and “the recovery of a money judgment is a prerequisite to an award of attorney fees”
18 under this statute. 5 As the Nevada Supreme Court explained in Smith v. Crown Financial
19 Services of America, being a defendant who defeats the plaintiff’s affirmative claims, resulting in
20
21
22
23
3
ECF No. 226 at 2. Williamson opposed the motion, ECF No. 223, but no reply was filed.
4
See supra note 1.
5
Smith v. Crown Financial Services of America, 890 P.2d 769, 774 (Nev. 1995).
2
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 3 of 8
1 a zero-dollar defense judgment, doesn’t trigger it. 6 Because Gunvalson and Nicholson did not
2 recover a money judgment, they cannot be awarded fees or costs under NRS 18.010(2).
3
4
II.
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Requests for default judgments against Sweetwaters, Cougar Juice, and Woo Hoo
[ECF Nos. 227, 228, 229, 231]
Having failed to succeed on any claim at trial, Williamson and Vicki’s Vodka ask this
6 court to reopen the judgment against them and award them default judgments against
7 Sweetwaters, Cougar Juice, and Woo Hoo. 7 Without even mentioning the nature of the claims
8 against these defaulting defendants, they argue that the allegations in the complaint establish the
9 liability of each of them, and they assert that the evidence that this court found insufficient to
10 justify any award of damages at trial should earn them $465,796.59 on default. 8 The plaintiffs
11 fatally overstate the effect of the entry of these defaults, and the varnish they now put on their
12 damages evidence makes it no more persuasive today than it was at trial.
13
A.
14
An entry of default results in all well-pled factual allegations being deemed true—except
Standards for evaluating requests for default judgments
15 as to damages. 9 And “necessary facts not contained in the pleadings, and claims [that] are
16 legally insufficient, are not established by default.” 10 So when deciding whether to grant default
17 judgment, the court still has an obligation to examine whether the claims are legally sufficient,
18
19
20
6
Id. at 775.
21
7
22
8
See ECF Nos. 228 at ¶ 7, 229 at ¶ 7, and 231 at ¶ 4.
9
TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 918 (9th Cir. 1987).
23
ECF No. 227 (motion to alter or amend judgment); ECF Nos. 228, 229, and 231 (motions for
default judgments against Sweetwaters, Cougar Juice, and Woo Hoo, respectively).
10
Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992).
3
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 4 of 8
1 and the plaintiff must prove up the requested damages. 11 In Eitel v. McCool, the Ninth Circuit
2 identified seven factors for courts to evaluate when deciding whether to enter a default judgment.
3 Based on the posture of this case, the most relevant of those factors are the merits of the
4 plaintiffs’ substantive claims and the sufficiency of the complaint against the defaulting
5 defendants—two factors that Williamson and Vicki’s Vodka gloss over completely. 12
6
B.
7
The verified complaint purports to contain claims against “all defendants,” which include
The complaint fails to state a claim against any defaulting defendant.
8 Sweetwaters, Cougar Juice, and Woo Hoo, for misrepresentation, fraud, and omissions; unjust
9 enrichment; promissory estoppel; civil conspiracy; and intentional infliction of emotional
10 distress. 13 But the factual allegations against these defendants are few. This is unsurprising
11 because the main target of this litigation was Gunvalson, with Nicholson and Gunvalson’s then12 boyfriend David Brooks Ayers as the secondary targets. 14 As Gunvalson and Nicholson’s
13 entities or affiliates, the defaulted defendants were tertiary targets at best, and the scarce
14 references to them fall far short of stating any cause of action.
15
There are just five substantive factual allegations that even mention the defaulting
16 defendants:
17
•
Nicholson falsely represented that he “and/or” Cougar Juice “were licensed
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distillers that could produce, manufacture and distribute” the vodka product
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(¶47(A));
20
11
Id.; see also Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) (listing “the merits of
21 plaintiff’s substantive claim” among the seven factors for a court to weigh in deciding whether to
grant default judgment).
22 12
Eitel, 782 F.2d at 1471–72.
23
13
ECF No. 1-1 in consolidated case 2:13-cv-2022-JAD-EJY.
14
See generally id.
4
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1
•
Nicholson falsely represented that he “and/or” Cougar Juice “had extensive
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experience in the production of [v]odka and that [he and/or [Cougar Juice] owned
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all the necessary equipment and expertise to produce the substantial amount of
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[v]odka that would be necessary to support the sales of” Vicki’s Vodka (¶ 47(G));
5
•
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Nicholson falsely represented that he was the owner of Sweetwaters, “which
would produce the vodka” (¶ 47(H));
7
•
In an August 20, 2013, Gunvalson’s counsel sent Williamson a letter that “took
8
the position that the three equal owners of” the Vicki’s Vodka company “were
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now[] Cougar Juice Vodka, LLC; Woo Hoo Productions, Inc. and Robert
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Williamson,” which was false (¶¶ 58–60); and
11
•
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“The tru[th] is that Nicholson and [Cougar Juice] relinquished any ownership” in
the company in August 2012 (¶ 61).
13 Although the complaint is rife with further factual allegations against Gunvalson, Ayers, and
14 Nicholson, it lacks any allegation that these individuals were acting on behalf of the defaulting
15 defendants such that the individuals’ conduct can be attributed to the defaulting defendants.
16 Even if the actions of Gunvalson and Nicholson would bind these entities, I determined through
17 the bench trial that the acts of those individuals did not subject them to liability under any theory
18 that the plaintiffs pursued. 15 I summarized that “the evidence at trial merely indicate[d] that a
19 group of people thought a business would succeed, worked hard to make that business happen,
20 but failed.” 16
21
22
23
15
See generally ECF No. 224.
16
Id. at 17.
5
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 6 of 8
1
And while there are numerous generalized statements in the complaint that “the
2 Defendants, and each of them” did various things like “conspire[] to work in concert to obtain
3 money from” Williamson and cause him “to suffer severe emotional distress” and other
4 damage, 17 these are conclusory allegations that lack any factual support. Conclusory statements
5 like these are not well-pled, and they are not taken as true as a result of the default. 18 So the
6 allegations in the complaint are insufficient to state any claim against the defaulting defendants.
7
Although the court may consider supplemental evidence in a default-judgment
8 proceeding, the plaintiffs offer none. They explain, “[g]iven the entry of defaults against Woo
9 Hoo, Sweetwater[,] and Cougar, it was not necessary to bring in liability witnesses to establish
10 claims that were already determined by the Court.” 19 The net result is that the plaintiffs have not
11 shown that any claim against Sweetwaters, Woo Hoo, or Cougar Juice was meritorious. So these
12 Eitel factors weigh against the entry of default judgment. 20
13
C.
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The evidence does not support an award of damages against the defaulting
defendants.
A less weighty but still relevant Eitel factor here 21 is “the sum of money at stake in the
15
16 action.” 22 Although the plaintiffs don’t mention the Eitel factors, let alone discuss how they
17 apply here, it is the damages analysis on which their briefing is focused. They argue that “the
18
19
17
See, e.g., id. at ¶¶ 64–65, 89, 93, 98, 112.
18
See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (noting that labels, conclusions, and
20 “formulaic recitation[s] of the elements of a cause of action” are not well-pled facts).
19
ECF No. 227 at 13.
21 20
Aldabe v. Aldabe, 616 F.2d 1089, 1092–93 (9th Cir. 1980) (“Given the lack of merit in
appellant’s substantive claims, we cannot say that the district court abused its discretion in
22
declining to enter a default judgment in favor of appellant.”).
23
21
The remaining Eitel factors are not useful because of the post-trial posture of this case.
22
Eitel, 782 F.2d at 1472.
6
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 7 of 8
1 evidence presented at trial establish[ed] out-of-pocket expenses in the sum of $465,796.59.” 23
2 They add that they “submitted evidence of compensatory damages, as well as future expectation
3 damages under more than one scenario,” highlighting the testimony of their “[f]orensic expert,
4 Joe Lewin” [sic]. 24
5
Indeed, Joe Leauanae offered three damages models, and the plaintiffs claimed that the
6 amount they are owed lies “somewhere between” $9,260,150.74, $15,433,598.50, and upwards
7 of $43,000,000. 25 For the reasons I detailed in my findings and conclusions, I found that “[t]hese
8 models are far too speculative and unsubstantiated to warrant an award of expectation damages”
9 and that they suffered from a “lack of credibility or evidentiary support.” 26 The same was true of
10 Williamson’s evidence of out-of-pocket loss. I “did not find that Williamson credibly testified
11 about the payments that he provided to fund the company. . . .” 27 “Throughout trial, he provided
12 off-the-cuff numbers about his expenses and, when shown evidence that contradicted those
13 claims, [he] either testified that he must have been mistaken or that those records were
14 inaccurate. He also frequently testified to improbably high expenses lacking any documentary
15 support, like spending upwards of $115,000 on travel for the company to Reno, Las Vegas, the
16 ‘East Coast,’ and parts of California. These,” I found, “are hardly the type of non-speculative
17 damages I am permitted to award.” 28 Nothing that Williamson and Vicki’s Vodka offer in these
18 pending motions persuades me that these findings were wrong or should be reversed. So even if
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22
23
ECF Nos. 228 at ¶ 7, 229 at ¶ 7, and 231 at ¶ 4.
24
ECF No. 227 at 12–13.
25
21
23
See ECF No. 224 at 18–19.
26
Id. at 19, incorporated herein by reference.
27
Id.
28
Id.
7
Case 2:13-cv-01019-JAD-EJY Document 234 Filed 01/06/22 Page 8 of 8
1 I had found that the entry of defaults established the defaulting defendants’ liability on any
2 theory, I would still deny the motions for default judgments because the damages evidence
3 remains too speculative and incredible to support an award. 29
4
Conclusion
5
IT IS THEREFORE ORDERED that:
6
•
Defendants’ Motion for Attorneys’ Fees and Costs [ECF No. 226] is DENIED;
7
•
Plaintiffs’ Motion to Alter or Amend Judgment and Motions for Default
8
Judgment against Sweetwaters Distillers, Inc., Cougar Juice Vodka, and Woo Hoo
9
Productions, LLC [ECF Nos. 227, 228, 229, 231] are DENIED.
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_______________________________
U.S. District Judge Jennifer A. Dorsey
January 6, 2022
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29
Nevada courts and the Ninth Circuit have long held that while “the amount of damages need
not be proven with mathematical certainty, testimony on the amount may not be speculative.”
Clark Cnty Sch. Dist. v. Richardson Constr., Inc., 168 P.3d 87, 97 (Nev. 2007); Hathaway
23
Dinwiddie Constr. Co. v. United Air Lines, Inc., 50 F. App’x 817, 822 (9th Cir. 2002)
(unpublished).
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