Ellis et al

Filing 214

ORDER denying 205 renewed motion for judgment as a matter of law. Signed by Judge Larry R. Hicks on 4/13/15. (Copies have been distributed pursuant to the NEF - JC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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MELINDA ELLIS,

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Plaintiff,
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v.
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ALESSI TRUSTEE CORPORATION; et al., )
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Defendants.
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3:09-CV-0428-LRH-WGC
ORDER

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Before the court is defendants Alessi Trustee Corporation (“ATC”) and Alessi & Koenig,

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LLC’s (“A&K”) renewed motion for judgment as a matter of law pursuant to Rule 50 of the

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Federal Rules of Civil Procedure. Doc. #205.1 Plaintiff Melinda Ellis (“Ellis”) filed an opposition

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to the motion. Doc. #208.

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I.

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Facts and Procedural History
In January 2000, plaintiff Ellis purchased real property in the Arrow Creek subdivision of

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Washoe County, Nevada. In December 2000, Ellis purchased another property in the same

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subdivision. Both properties were subject to recorded Covenants, Conditions, and Restrictions

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(“CC&Rs”) which include the collection of homeowner’s association (“HOA”) dues for the care

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and maintenance of the subdivision.

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Refers to the court’s docket number.

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In early 2008, Ellis defaulted on her HOA obligations for both properties. In response,

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Arrow Creek retained defendant A&K, along with its separately formed collection services

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company defendant ATC to collect on Ellis’ delinquent assessments. ATC and A&K contacted

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Ellis to collect then began non-judicial foreclosure proceedings against her in an attempt to collect

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the delinquent assessments. During this process, defendants sent Ellis collection notices and

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recorded liens against the properties in ever increasing amounts as defendants added their own

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costs and fees to the collection amounts.

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On July 15, 2009, Ellis filed a complaint against ATC and A&K alleging three causes of
action: (1) breach of fiduciary duty; (2) violation of the Fair Debt Collection Practices Act
(“FDCPA”); and (3) civil racketeering. Doc. #1, Exhibit A.

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A jury trial was held on Ellis’ claims from January 20, 2015, through January 26, 2015.

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Upon the close of Ellis’ case in chief, defendants moved for judgment as a matter of law on Ellis’

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claims. The court granted the motion as to Ellis’ breach of fiduciary duty claim but denied the

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motion as to the civil racketeering and FDCPA claims. On January 26, 2015, the jury returned a

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verdict in favor of Ellis on her remaining claims. Thereafter, defendants filed the present renewed

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motion for judgment as a matter of law. Doc. #205.

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II.

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Legal Standard
Under Rule 50(b), after the court enters judgment, a party may file a renewed motion for

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judgment as a matter of law. Rule 50 provides that judgment as a matter of law is appropriate if “a

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reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that

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issue.” FED. R. CIV. P. 50(a)(1). Under Rule 50, the court reviews whether “substantial evidence”

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supports the jury verdict. See Hagen v. City of Eugene, 736 F.3d 1251, 1256 (9th Cir. 2013). A

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verdict is not supported by substantial evidence “when the evidence, construed in the light most

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favorable to the nonmoving party, permits only one reasonable conclusion, which is contrary to the

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jury’s verdict.” Id. In other words, Rule 50 “allows the trial court to remove cases or issues from

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the jury’s consideration when the facts are sufficiently clear that the law requires a particular
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result.” Weisgram v. Marley Co., 528 U.S. 440, 448 (2000).

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III.

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Discussion
In its renewed motion for judgment as a matter of law, defendants challenge the jury’s

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verdict as to the civil racketeering claim and the jury’s award of punitive damages. See Doc. #205.

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Specifically, ATC and A&K contend that there is insufficient evidence to support the jury’s finding

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that either defendant engaged in civil racketeering. Further, defendants contend that there is

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insufficient evidence to support the jury’s award of punitive damages. Each separate challenge is

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addressed below.

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1. Civil Racketeering

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In order to prevail on a claim for civil racketeering, a plaintiff must prove: (1) that the

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defendant(s) engaged in at least two crimes related to acts of racketeering; (2) the time, place and

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manner of each act; and (3) damages. See Moore v. Kayport Package Express, Inc., 885 F.2d 531,

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541 (9th Cir. 1989).

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In her complaint, Ellis brought her civil racketeering claim under Nevada law pursuant to

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NRS 207.350 et seq. NRS 207.360 lists all predicate acts which support a civil racketeering claim

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under Nevada law. These predicate acts include “obtaining possession of money or property valued

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at $650 or more . . . by false pretenses.” NRS 207.360(26). False pretenses is defined as an intent to

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defraud through a written false representation which causes reliance on that representation by the

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victim.

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In their motion, defendants argue that there was no evidence presented at trial that either

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ATC or A&K engaged in any false written representation in order to obtain money from Ellis and

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therefore, the jury’s verdict of civil racketeering is unsupported by the evidence. See Doc. #205.

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The court disagrees.

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The court has reviewed the evidence and testimony submitted at trial and finds that there is

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sufficient evidence to support the jury verdict on civil racketeering as to both defendants. For

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example, with respect to ATC, Ellis introduced evidence at trial that ATC demanded ever
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increasing amounts for her allegedly unpaid assessments that far surpassed the amount at which her

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delinquent assessments were growing. In particular, Ellis introduced evidence that in June of 2007,

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ATC recorded a lien against one of her properties for $1,962.58. Yet, only one month later, ATC

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recorded a new notice of default and election to sell on that same property in the amount of

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$3,000.63, far more than the $150 increase for a single month of unpaid assessments. Ellis testified

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that ATC never explained this increase and simply demanded that the new amount was now

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payable and due. Similarly, Ellis testified that ATC’s demand had ballooned to $8,948.33 - more

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than three times the amount she actually owed for the delinquent HOA dues - by April 16, 2008,

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less than a year later. Further, Ellis testified that despite setting up and accepting a payment plan to

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prevent losing her house, ATC set a trustee’s sale before the first payment was even due. The court

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finds that this evidence was sufficient evidence for the jury to determine that defendant ATC was

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acting under false pretenses in trying to get Ellis to pay for costs and attorney’s fees incurred by

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ATC that were never explained or authorized in any of the collection notices or liens.

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Ellis presented similar evidence as to defendant A&K. For example, Ellis proffered

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evidence that A&K recorded two liens against one of her properties in November 2008. One was

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for $7,021.28 on November 18, 2008 and the other was for $10,491.07 on November 20, 2008,

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only two days later. Ellis testified that as before, there was no explanation for the drastic increase

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of $3,000 in only two days time. Thus, Ellis introduced substantial evidence that, just like

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defendant ATC, A&K inflated the amounts due from Ellis in an attempt to obtain money in an

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amount greater than $650 from her. Taking all of the evidence together, the court finds that the

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evidence was sufficient to support the jury verdict.

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2. Punitive Damages

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In order to support an award of punitive damages, a plaintiff must establish by clear and

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convincing evidence that defendant(s) acted with oppression, fraud, or malice. NRS 42.005. Here,

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defendants argue that there is no evidence to support the jury’s finding in this case that either

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defendant acted with oppression, fraud, or malice. Rather, defendants argue that any conduct was
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simply the result of mistake and therefore the jury’s verdict awarding punitive damages is not

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supported by the evidence and should be thrown out.

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The court disagrees. Initially, the court notes that at no time did defendants move for

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judgment as a matter of law with respect to Ellis’ punitive damages claim. As such, defendants are

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precluded from challenging the punitive damages award as a matter of law. See E.E.O.C. v. Go

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Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009) (“Because it is a renewed motion, a proper

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post-verdict Rule 50(b) motion is limited to the grounds asserted in the pre-deliberation Rule 50(a)

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motion. Thus, a party cannot properly ‘raise arguments in its post-trial motion for judgment as a

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matter of law under Rule 50(b) that it did not raise in its preverdict Rule 50(a) motion.”).

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Additionally, as addressed above, Ellis introduced substantial evidence demonstrating that

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defendants acted with both fraud and malice in their attempts to collect monies above the amount

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owed on Ellis’ delinquent HOA assessments. Therefore, the court shall deny defendants’ motion.

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IT IS THEREFORE ORDERED that defendant’s renewed motion for judgment as a matter
of law (Doc. #205) is DENIED.

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IT IS SO ORDERED.

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DATED this 13th day of June, 2015.

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__________________________________
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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