Case Title: JAMES P. WUNSCH v. KELLY M. PICKERING, f/k/a KELLY M. WUNSCH

Citation: 

Docket Number: S-10-0004

State: wyoming

Court: Wyoming Supreme Court

Date: 2011-04-12T00:00:00Z

Document:
JAMES P. WUNSCH v. KELLY M. PICKERING, f/k/a KELLY M. WUNSCH2011 WY 59Case Number: No. S-10-0004Decided: 04/12/2011NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2011

 
 
JAMES P. 
WUNSCH,

Appellant 
(Plaintiff),

 
 
v.

 
 
KELLY M. PICKERING, 
f/k/a KELLY M. WUNSCH,

Appellee 
(Defendant).

 
 
 
 
Appeal 
from the District Court of Teton County

The 
Honorable Nancy J. Guthrie, Judge

 

Representing 
Appellant:

Matthew Giacomini and 
Andrew Reid, Springer and Steinberg, PC, Denver, Colorado.  Argument by Mr. 
Reid.

 
 
Representing 
Appellee:

Lea Kuvinka, Kuvinka 
& Kuvinka, PC, Jackson, Wyoming.

 
 
 
 
Before KITE, C.J., 
and GOLDEN, HILL, VOIGT, and BURKE, JJ.

 
 
BURKE, 
Justice.

 
 

[¶1]        
In 
this post-divorce case between James Wunsch and Kelly Pickering, formerly known 
as Kelly Wunsch, the district court resolved a dispute between the parties 
concerning an amount of money Mr. Wunsch owed Ms. Pickering pursuant to the 
provisions of their divorce settlement agreement.  Mr. Wunsch challenges the district 
court's decision.  We will 
affirm.

 
 
ISSUES

 
 

[¶2]      
Mr. Wunsch presents 
these issues:

 
 

1.    
Did the district 
court abuse its discretion by issuing an order compelling Mr. Wunsch to produce 
documents that were irrelevant or not in his possession, custody, or 
control?

 
 

2.    
After the district 
court entered default against Mr. Wunsch as a sanction for failing to 
produce the documents as ordered, did the district court err as a matter of law 
by restricting Mr. Wunsch's participation in the subsequent hearing on 
damages?

 
 

3.    
Was the evidence 
sufficient to support the trial court's award of damages?

 
 
FACTS

 
 

[¶3]        
Before their divorce 
in 2004, Mr. Wunsch and Ms. Pickering owned and operated a financial 
services business, helping to invest their clients' funds in a wide variety of 
financial products, including mutual funds, stocks, bonds, annuities, and life 
insurance.  The two were affiliated 
with LPL Financial Corporation, a financial investment company.  During the divorce, the couple entered 
into a property settlement agreement that was later approved by the district 
court and incorporated into the divorce decree.  The agreement provided generally that 
Mr. Wunsch would continue operating most of the financial services, while Ms. 
Pickering would receive payments to compensate for her share of the former 
business.  The agreement, referring 
to Mr. Wunsch as "JIM" and to Ms. Pickering as "KELLY," included this 
fee-splitting provision:

 
 
The parties will 
share equally any fees earned on joint client accounts . . . .  If JIM replaces any of the above joint 
client accounts, JIM and KELLY will share equally the fees on the replaced 
account . . .  until 
such time as KELLY has received in fees an amount equal to two times the annual 
earnings on the amount replaced, based on the fee charged before the 
replacement.  At such time, KELLY 
shall no longer receive any fees on the replaced account.

 
 

[¶4]        
Not long after the 
divorce, disputes developed between the parties about the interpretation and 
administration of this agreement.  
The disputes were mediated, and many of them settled.  In this mediation, the parties agreed to 
appoint an accountant as Administrator to perform the accounting required under 
the settlement agreement.  The 
mediation did not resolve the parties' disagreement about the meaning of the 
phrase "two times the annual earnings on the amount replaced."  That dispute was ultimately resolved in 
Wunsch v. Pickering, 2008 WY 131, 195 P.3d 1032 (Wyo. 2008).  

 
 

[¶5]        
The Administrator 
developed a list of approximately 165 joint accounts held by the parties as of 
the date of divorce.  As long as 
clients' funds remained in the parties' joint account, the accounting was 
relatively simple.  The financial 
services company could split the fees, and send one half directly to 
Mr. Wunsch and one half directly to Ms. Pickering.  Both parties had access to information 
about the accounts and the fees received.  
The Administrator could use this information to reconcile the accounts 
and, when some adjustment was necessary because of medical expenses for the 
children, for example, the Administrator would facilitate payments from one 
party to the other to balance the accounts. 

 
 

[¶6]        
The accounting was 
more difficult when clients removed their funds from the parties' joint 
accounts.  A client might take the 
funds and reinvest in another financial product offered by Mr. Wunsch, such 
as insurance or annuities.  In their 
settlement agreement, the parties referred to this as a "replaced" account.  For a replaced account, Mr. Wunsch 
would continue to receive fees, and under the agreement, Ms. Pickering 
remained entitled to half of those fees.  
Because a replaced account was held by Mr. Wunsch individually, 
however, Ms. Pickering did not have the same access to information about it, and 
the fees would not be paid directly to her.  She and the Administrator had to rely on 
information provided by Mr. Wunsch to determine what amount Ms. Pickering 
should receive pursuant to the settlement agreement.

 
 

[¶7]        
However, a client 
might instead remove funds from the parties' joint account and, for example, 
keep the cash or reinvest through a different financial services company 
unrelated to Mr. Wunsch.  For a 
"non-replaced" or "closed" account such as this, Mr. Wunsch would no longer 
earn any fees.  According to 
Mr. Wunsch, he would, in turn, not owe Ms. Pickering any fee split 
under the terms of the settlement agreement.

 
 

[¶8]        
As noted above, the 
Administrator originally listed approximately 165 joint accounts held by the 
parties.  By the time the current 
dispute arose, the Administrator had listed approximately 50 of those as 
"inactive" accounts that were no longer held in the parties' joint 
accounts.  A dispute developed 
concerning these inactive accounts.  
Ms. Pickering pointed out that, if the accounts had been replaced 
and Mr. Wunsch was still earning fees on them, then she was still owed half 
of those fees.  Mr. Wunsch 
claimed, to the contrary, that these accounts had not been replaced and he owed 
Ms. Pickering no fees relating to these accounts.  The Administrator could tell that the 
clients' funds had been removed from the parties' joint accounts, but did not 
have adequate information to tell if the accounts had been replaced.  He continued to calculate the "projected 
amount" Ms. Pickering would be owed if these accounts had been replaced, but he 
could not determine whether Ms. Pickering was actually owed these amounts. 

 
 

[¶9]        
In 2009, Mr. Wunsch 
filed a motion asking the district court to clarify what, if anything, he owed 
Ms. Pickering on certain accounts.  
Ms. Pickering filed a response asserting that Mr. Wunsch had 
replaced these accounts, but had breached the settlement agreement by failing 
"to disclose sufficient information to [allow her or the Administrator] to 
follow the replaced accounts."  
Based on this alleged breach, she asked the district court to order 
Mr. Wunsch to pay the entire projected amount.  The district court set a hearing on 
these issues for May 8, 2009.

 
 

[¶10]     
On March 24, 2009, 
Ms. Pickering served discovery requests on Mr. Wunsch.  These included requests for admissions, 
interrogatories, and requests for production of documents.  Among the documents requested were those 
referring to or relating to the "inactive" accounts, the tax returns and forms 
for Mr. Wunsch individually and for Wunsch Financial Services, Inc., and the 
commission statements Mr. Wunsch had received since August of 2005.  Mr. Wunsch's response, delivered on 
April 28, 2009, was generally to object to the production of these documents, 
stating that the requests were "irrelevant and not calculated to lead to the 
discovery of admissible evidence and . . . propounded only to harass 
and intimidate."  Ms. Pickering 
filed an "Expedited Motion to Compel" on April 29, 2009, arguing that the 
objections were both untimely and without merit.  Responding to the motion to compel, 
Mr. Wunsch defended his objections, but further explained that he had 
requested information about the 50 inactive accounts from LPL.  LPL did not respond until April 28, 
2009, when it informed Mr. Wunsch that it could not provide the requested 
information without a court order.  
Mr. Wunsch had obtained the court order and sent it to LPL, but had not 
yet received the documents.

 
 

[¶11]     
The district court 
held a brief hearing on the motion to compel on May 4, 2009.  Both sides presented argument, with Ms. 
Pickering contending that she needed the requested documents in order to present 
her case at the May 8 hearing, and Mr. Wunsch contending that the documents were 
irrelevant, unnecessary, and unavailable.  
Mr. Wunsch also indicated that the documents requested from LPL 
should be delivered soon, and near the end of this hearing, the parties 
suggested that they could meet on the evening of May 7, just prior to the 
hearing, and attempt to work out their differences.  Encouraging the parties to meet as 
scheduled, the district court took the motion to compel under 
advisement.

 
 

[¶12]     
The record does not 
explicitly reflect the parties' meeting on May 7, but their comments at the May 
8 hearing suggest that they had met.  
They indicated that some documents had been received from LPL and 
delivered to Ms. Pickering.  Based 
on information from the LPL documents, Mr. Wunsch had prepared a summary of the 
50 inactive accounts, indicating the date the funds had been transferred from 
the joint account, the amount transferred, and to whom the funds were paid.  When Mr. Wunsch attempted to 
introduce this summary as a hearing exhibit, Ms. Pickering objected to the 
lack of foundation, stating that "this is exactly the type of material which we 
were not allowed discovery on."  She 
argued that the underlying information had been compiled by an LPL employee who 
was not present to testify or be cross-examined, using documents that were not 
identified or produced.  She 
objected that the exhibit was only a summary, and because it lacked any 
foundation or "backup material" to support it, it was inadmissible.  Emphasizing that the backup materials 
were the same documents Mr. Wunsch had failed to produce in response to her 
discovery requests, Ms. Pickering offered a continuing objection to the 
summary document.  

 
 

[¶13]     
Although the district 
court neither admitted nor excluded the disputed document, the hearing 
continued, with both parties questioning the Administrator.  The district court then announced a 
short recess.  Following the recess, 
the parties informed the court that they had "reached some agreements" about 
certain interim payments Mr. Wunsch would make to Ms. Pickering.  They also informed the court that the 
parties "may still have discovery problems," but "could perhaps resolve them . . 
. in time for another hearing."  The 
district court agreed to continue the hearing, and scheduled the next round for 
September 30, 2009. 

 
 

[¶14]     
Efforts to resolve 
the discovery dispute were apparently fruitless, as the next document in the 
record is Ms. Pickering's "Renewed Expedited Motion to Compel," filed September 
2, 2009.  This motion stated that 
Ms. Pickering had served additional discovery requests on July 29, 2009, and 
that Mr. Wunsch had responded on August 25, 2009.  He objected to nearly every request as 
"overbroad, unduly burdensome and time consuming, irrelevant, not calculated to 
lead to the discovery of admissible evidence, [and] propounded only to harass 
and intimidate [Mr. Wunsch]."  To 
the request for his commission statements, Mr. Wunsch also objected that the 
request sought "confidential, proprietary and privileged information," and 
claimed that he did not "have any of this information, he is not required to 
maintain this information and he no longer has access to the LPL system to 
obtain the information."  In her 
renewed motion to compel, Ms. Pickering presented arguments similar to 
those made regarding the previous motion to compel.  Mr. Wunsch's response likewise presented 
arguments similar to those previously employed.

 
 

[¶15]     
On September 17, 
2009, the district court issued an order granting Ms. Pickering's renewed 
expedited motion to compel.  Without 
further explanation, the district court concluded that Ms. Pickering's discovery 
requests were "proper and necessary."  
It ordered Mr. Wunsch to "make full and complete responses to the 
discovery served on him on July 29, 2009," and to serve the responses "no later 
than September 25, 2009."  

 
 

[¶16]     
Mr. Wunsch 
provided a response by the court's deadline, but Ms. Pickering remained 
unsatisfied with the production.  On 
September 28, 2009, she filed an "Expedited Motion for Sanctions; Motion for 
Entry of Default Judgment, Attorney's Fees and Costs," asserting that 
Mr. Wunsch's responses to her discovery request and the court's order 
remained deficient.  She asserted 
that sanctions were appropriate, and suggested that default should be entered 
against Mr. Wunsch.

 
 

[¶17]     
The district court 
convened the hearing as scheduled on September 30, 2009, and proceeded to 
consider Ms. Pickering's motion for sanctions.  Ms. Pickering reasserted that Mr. 
Wunsch's failure to provide the requested documents left her unable to make her 
case that the 50 inactive accounts had been replaced.  Mr. Wunsch asserted that he had 
provided adequate responses to the discovery requests, in compliance with both 
the Wyoming Rules of Civil Procedure and the district court's order to 
compel.  After taking a brief 
recess, the district court granted Ms. Pickering's motion for sanctions  "I 
feel I have no other choice"  and stated that a default would be entered 
against Mr. Pickering.  The 
district court then heard the parties' evidence and arguments concerning the 
amount of damages that should be awarded.  
Ms. Pickering asserted that she should receive over $195,000, which 
included the amount calculated by the Administrator as the projected amount she 
was entitled to if all of the 50 inactive accounts had been replaced by 
Mr. Wunsch.  After considering 
the parties' positions, the district court awarded damages in the amount 
requested by Ms. Pickering.

 
 

[¶18]     
Mr. Wunsch appealed 
from two of the district court's rulings in this matter.  He challenges the grant of Ms. 
Pickering's motion to compel discovery, and he appeals the district court's 
award of damages on the bases that he was not allowed to participate fully in 
the damages hearing, and that there was insufficient evidence to support the 
district court's award.  He has not 
appealed the entry of default.

 
 
DISCUSSION

 
 
1.         
Did the district court abuse its discretion by issuing an order 
compelling Mr. Wunsch to produce documents that were irrelevant or not in 
his possession, custody, or control?

 
 

[¶19]     
We review a district 
court's decision to compel production for abuse of discretion.  Inskeep v. Inskeep, 752 P.2d 434, 436 (Wyo. 1988).  When we review for abuse of discretion, 
the ultimate issue is whether the district court could reasonably conclude as it 
did.  Lieberman v. Mossbrook, 2009 WY 65, ¶ 64, 208 P.3d 1296, 1314 (Wyo. 
2009).

 
 

[¶20]     
Mr. Wunsch first 
asserts that the motion to compel should not have been granted because the 
documents Ms. Pickering requested through discovery were not relevant.  The argument lacks merit.  The documents requested by Ms. Pickering 
were plainly relevant to her claim that Mr. Wunsch had replaced certain joint 
accounts, and owed her fees on those accounts in accordance with the settlement 
agreement reached in the divorce.  

 
 

[¶21]     
In her Renewed 
Expedited Motion to Compel, Ms. Pickering explained the relevance of the 
information she had requested about Mr. Wunsch's representative identification 
numbers:

 
 
In past and recent 
discovery, [Ms. Pickering] requested documentation on all rep ID numbers held by 
[Mr. Wunsch] individually, with others, or by his corporation.  All commissions are paid through a 
registration known as a "rep ID" number.  
While the mediation agreement requires [Mr. Wunsch] to turn over 
commission statements, [he] can have other rep ID numbers with others, such as 
partners, and can have an unlimited amount of shared rep ID numbers.  He would also receive another rep ID 
number when he changes affiliations, such as he recently did [by leaving LPL and 
becoming associated with another financial institution].

 
 
[Mr. Wunsch] has 
objected to producing this information twice.  [Ms. Pickering] is only interested in 
tracking whether any of the joint accounts on which she is owed are still being 
held by [Mr. Wunsch].  

 
 
[Ms. Pickering] 
requested production to ensure that accounts which she is to be paid on, and is 
not being paid on, are not generating income to which she is entitled through 
another rep ID number [that] is being paid to [Mr. Wunsch] alone. . . .  [Ms. Pickering] is entitled to 
documentation on other rep ID numbers to ensure that commissions to which she is 
entitled are not making an end-run around the Administrator and being paid [to 
Mr. Wunsch] through another rep ID number.

 
 
She also explained 
why she sought to discover Mr. Wunsch's commission 
statements:

 
 
In addition to the 
rep ID tracking, commission statements are necessary for several 
reasons:

 
 
First, [Ms. 
Pickering] must establish which commissions she is or is not entitled to share 
in.  [She] agrees that she is not 
entitled to accounts which [Mr. Wunsch] obtained after the divorce.  In order to establish what commissions 
are from accounts in the accounting which should be shared vs. which commissions 
[she] does not share in, commission statements are 
necessary.

 
 
Second, commission 
statements will track not only investment account commissions, but also other 
replacement products covered by the divorce settlement.  An example of replacement products which 
are not investment accounts would be life insurance policies and a variety of 
other financial products. . . .  In 
instances where the replacement is made [into Mr. Wunsch's] individual rep ID or 
an undisclosed rep ID because the account was moved with the consent of the 
client, [Ms. Pickering] is not privy to commission information unless [it is] 
produced as requested.

 
 
Finally, with respect 
to her request for tax information, Ms. Pickering provided this explanation to 
the district court:

 
 
[Ms. Pickering] has 
requested documents which should track with other materials with regard to 
commissions in order to assure there are no discrepancies.  With tax returns, commission income is 
shown and 1099's will be received.  
These will cover all of [Mr. Wunsch's] income sources.  The purpose of this request is not to 
make a claim against commissions in which [Ms. Pickering] should not share, but 
to reconcile the information [to] assure that [she] is receiving what she is 
entitled to.  If, for instance, a 
1099 is received from an insurance company commission, then [Ms. Pickering] 
can inquire whether that was for a joint account or not.  She can match this with commission 
statements [and] eliminate commissions to which she is not entitled.  If [Mr. Wunsch] is not required to 
produce this information, he can, without question, withhold 
[Ms. Pickering's] share of commissions.

 
 

[¶22]     
Relevant evidence is 
"evidence having any tendency to make the existence of any fact that is of 
consequence to the determination of the action more probable or less probable 
than it would be without the evidence."  
W.R.E. 401.  If the 
information sought by Ms. Pickering indicated that clients formerly invested in 
the parties' joint accounts had moved those investments through 
Mr. Wunsch's individual account, that would tend to make it more probable 
that those joint accounts had been replaced.  To the extent the information related 
only to Mr. Wunsch's individual clients, that would tend to make it less 
probable that those accounts had been replaced.  The district court could reasonably 
determine that the documents sought by Ms. Pickering were relevant.  "Parties may obtain discovery regarding 
any matter, not privileged, that is relevant to the claim or defense of the 
party seeking discovery."  W.R.C.P. 
26(b)(1).  The district court did 
not abuse its discretion in granting the order to compel the production of these 
documents.

 
 

[¶23]     
The fact that Mr. 
Wunsch had produced some documents subpoenaed from LPL did not obviate the need 
for the additional documents requested by Ms. Pickering.  Those documents indicated dates on which 
the joint accounts had been closed, the amount of funds in those accounts, and 
to whom the funds were paid.  But as 
Ms. Pickering points out, if an account was closed and a check sent to the 
client, the client could still have used the money to purchase other financial 
products from Mr. Wunsch.  Ms. 
Pickering adequately explained to the district court why the information from 
LPL was insufficient by itself, and why the additional documents she had 
requested were needed to develop her case.

 
 

[¶24]     
Mr. Wunsch's 
objection that the documents were not in his possession, custody, or control is 
unsupported by facts in the record.  
Mr. Wunsch never represented that the "rep ID numbers" were unavailable 
to him.  With regard to the 
commission statements, he initially asserted that they were sent to him only in 
electronic format, and had all been deleted, and were therefore not in his 
possession.  However, at the hearing 
held on September 30, 2009, Mr. Wunsch's counsel explained that "the 
commission statements from LPL, you know, I suppose we could try and get those 
from LPL, but he does not have them and they are not in his care, custody or 
control."  This amounts to an 
admission of the seemingly obvious fact that, whether or not Mr. Wunsch had 
the commission statements in hand, he could have obtained copies from 
LPL.

 

[¶25]     
Later, during the 
same hearing, counsel for Mr. Wunsch told the district court, "Hopefully we 
can get the LPL commission statements that he did not have in his possession or 
available to him or on his computer."  
The district court pointedly asked, 

 
 
Where was all this 
stuff, [Counsel], this summer?  I 
mean here we are you say you're going to get these things and so we're looking 
at maybe setting aside another day or half day [for another hearing].  But why aren't these things  you say 
you can get them or they're on their way why don't we have them 
now?

 
 
Counsel 
responded:

 
 
Because they were not 
requested by Mr. Wunsch and . . . he did not understand that if he could ask for 
it and receive it then that would be in his control, he believed it was that if 
he had it in his possession or on his computer[,] that was what he had to 
produce.

 
 
Mr. Wunsch 
claims on appeal that the district court erred by ordering him to produce the 
commission statements because they were outside of his possession, custody, or 
control.  We reject this claim not 
just because it lacks factual support in the record, but further, because it is 
contradicted by the facts of record.

 
 

[¶26]     
As to the tax 
records, it appears that Mr. Wunsch did produce all of the requested information 
except for the tax returns and 1099 Forms for 2008.  Mr. Wunsch repeatedly represented that 
the 2008 tax returns were still being prepared, and so were not yet in 
existence.  He asserted that his 
1099 Forms for 2008 were unavailable for the same reason.  From a practical standpoint, the 
assertion that the 1099 Forms for 2008 were still unavailable as of September 
30, 2009, seems untenable.  Although 
the district court did not specify this as one of the reasons for ordering these 
tax forms to be produced, it would not have been unreasonable to reject this 
assertion for lack of credibility.  
Moreover, in the hearing held on September 30, 2009, Mr. Wunsch's counsel 
stated that "The 1099 for 2008 has been ordered and should be here," another 
admission that the document was not beyond Mr. Wunsch's 
control.

 
 

[¶27]     
If the 2008 tax 
returns were the only documents at issue, we might agree with Mr. Wunsch 
that the district court erred in compelling production.  However, as discussed above, 
Mr. Wunsch had failed to disclose his "rep ID numbers," his commission 
statements, and his 1099 forms for 2008.  
His assertion that all of these documents were beyond his possession, 
control, and custody, is unpersuasive.

 
 

[¶28]     
For these reasons, 
and after careful review of the record on appeal, we cannot say it was 
unreasonable for the district court to conclude that the documents requested by 
Ms. Pickering through discovery were relevant and within Mr. Wunsch's 
possession, custody, or control.  It 
was not an abuse of discretion to issue an order compelling Mr. Wunsch to 
produce the disputed documents.

 
 
2.         
After the district court entered default against Mr. Wunsch as a 
sanction for failing to produce the documents as ordered, did the district court 
err as a matter of law by restricting Mr. Wunsch's participation in the 
subsequent hearing on damages?

 
 

[¶29]     
We note again that 
Mr. Wunsch has not appealed the district court's entry of default against him as 
a sanction for violation of its discovery order.  However, we have previously recognized 
that an entry of default, establishing liability, is separate and distinct 
matter from a default judgment establishing the amount of damages. Spitzer v. Spitzer, 777 P.2d 587, 592 (Wyo. 1989).  Accordingly, while we cannot review the 
entry of default at this point, we may consider Mr. Wunsch's issues 
relating to the default judgment.

 
 

[¶30]     
Mr. Wunsch concedes 
that the district court's entry of default as a discovery sanction under 
W.R.C.P. 37 and 55 established that he was liable on Ms. Pickering's 
claims.  Following the entry of 
default, he was no longer entitled to contest, or present evidence relating to, 
the issue of liability.  But, he 
argues, he was still entitled to present evidence on the issue of 
damages:

 
 
An entry of default 
goes solely to liability and is, by definition, not a result of any trial on the 
merits. . . .  In contrast, a 
default judgment is a ruling on the merits on the issue of damages.  It is a wholly separate proceeding from 
the entry of default and, where damages are unliquidated, requires a sufficient 
showing of damages to support a trial court's award.  As a separate proceeding on the merits, 
a party who may have been foreclosed from a defense on the merits as a sanction 
for discovery non-compliance has the right to litigate damages, to fully 
participate and submit evidence in the evidentiary proceeding on unliquidated 
damages.

 
 
(Internal citations 
and emphasis omitted.)  We agree 
that Mr. Wunsch's argument is consistent with our precedent.  See, e.g., McGarvin-Moberly Construction Co. v. 
Welden, 897 P.2d 1310, 1315 
(Wyo. 1995) ("[I]n the assessment of damages following entry of default, a 
defaulting defendant has the right to participate in the proceedings and 
introduce affirmative evidence on its own behalf in mitigation of 
damages.").

 
 

[¶31]     
Mr. Wunsch claims 
that, during the hearing held on damages, the district court denied his right to 
participate in the proceedings by improperly prohibiting him from presenting 
evidence relating to the damages he owed Ms. Pickering.  He asserts that the district court erred 
as a matter of law in restricting his participation in the hearing, and because 
this raises a question of law, it must be reviewed de novo.  However, the record reflects that 
Mr. Wunsch was afforded an opportunity to participate in the damages 
hearing, and that he did participate.  
The real basis of his complaint is that the district court excluded most 
of the evidence he sought to introduce at that hearing.  We therefore agree with 
Ms. Pickering that this is more properly cast as an evidentiary issue.  We review a district court's rulings on 
the admission or exclusion of evidence for abuse of discretion.  Cramer v. Powder River Coal, LLC, 2009 
WY 45, ¶ 22, 204 P.3d 974, 
981 (Wyo. 2009).

 
 

[¶32]     
As the basis for his 
argument that he was improperly restricted from participating in the damages 
hearing, Mr. Wunsch asserts that Ms. Pickering was "permitted to testify at 
length as to her speculation that each of the [50 inactive] accounts had been 
replaced by Mr. Wunsch."  In 
contrast, as he explains it, "Mr. Wunsch attempted to respond that he had not 
replaced those accounts and had, therefore, received no unreported income from 
them," but the district court "repeatedly sustained Ms. Pickering's objections 
to such evidence and ruled that the discovery sanction also foreclosed Mr. 
Wunsch from presenting such evidence."

 
 

[¶33]     
Mr. Wunsch's argument 
rests on a misconception about the effect of the district court's entry of 
default against him.  Through her 
discovery requests, Ms. Pickering sought documents from which she could find 
evidence indicating which of the 50 inactive accounts had been replaced and 
which had not.  Mr. Wunsch did not 
produce the requested documents.  
When the district court entered default against him, it was as a sanction 
for failing to provide the documents with which Ms. Pickering could prove 
which accounts had been replaced.  
The default, therefore, served to prohibit Mr. Wunsch from contesting 
that the accounts had been replaced.

 
 

[¶34]     
Because the effect of 
the entry of default was to establish that the disputed accounts had been 
replaced, evidence offered by Mr. Wunsch to show that the accounts had not 
been replaced was irrelevant.  This 
example from the hearing is illustrative of the many relevancy objections 
sustained by the district court:

 
 
Q.  [by counsel for Mr. Wunsch]  Mr. Wunsch, on Exhibit EE, [Ms. 
Pickering's] calculation of damages here of a $195,000 penalty, what  that 
assumes that all the accounts were replaced by you; is that 
right?

 
 
A.  It does.

 
 
Q.  And that all the accounts were somehow 
purchased by you?

 
 
A.  It assumes that if every account was 
replaced by me that that is what I would owe [Ms. 
Pickering].

 
 
Q.  And that every account on that list you 
somehow received compensation for?

 
 
A.  That is what it 
assumes.

 
 
Q.  And of  So of these approximately 165 
accounts in Exhibit EE how many of those did you actually 
transfer?

 
 
[by counsel for Ms. 
Pickering]  I'm going to object, 
it's irrelevant.  You've already 
ruled on the transfer issue and so you can't get into  it's irrelevant at this 
point.

 
 
THE COURT:  And I'm going to sustain 
that.

 
 
Because the entry of 
default decided the issue of whether the accounts had been replaced, and decided 
it against Mr. Wunsch, any evidence suggesting that the accounts had not been 
replaced was irrelevant, and the district court did not err in excluding 
it.

 
 
3.         
Was the evidence sufficient to support the trial court's award of 
damages?

 
 

[¶35]     
Mr. Wunsch correctly 
contends that, following the entry of default against him, Ms. Pickering still 
had the burden of proving her damages.  
Spitzer, 777 P.2d  at 593.  He asserts that Ms. Pickering failed to 
meet that burden because she "was unable to provide any evidence at all, other 
than her bare suspicions and speculations, that the 51 inactive' joint client 
accounts that were the basis for her damages had ever generated any fees or 
income from which she could claim a share under paragraph 22A of the Settlement 
Agreement."  When we are asked to 
consider whether the evidence was sufficient to sustain a damages award, 
we

 
 
assume 
that the evidence of the prevailing party is true. We give this evidence every 
favorable inference and leave out of consideration any conflicting evidence of 
the other party.  The trial court's 
findings are presumed to be correct and will not be disturbed absent a showing 
that they are clearly erroneous, inconsistent, or contrary to the great weight 
of the evidence.

 
 

Examination 
Mgmt. Servs. v. Kirschbaum, 
927 P.2d 686, 698 (Wyo. 1996) 
(internal citation omitted).

 
 

[¶36]     
As with the previous 
issue, Mr. Wunsch's argument is based on a misconception of the effect of the 
entry of default against him.  It 
amounted to a ruling that the inactive accounts had all been replaced by Mr. 
Wunsch.  Ms. Pickering was no longer 
required to prove that any of the accounts had been replaced.  She had to prove what her damages were 
if all the accounts had been replaced.

 
 

[¶37]     
Mr. Wunsch 
recognized, as shown in the quotation above from the damages hearing, that Ms. 
Pickering's "calculation of damages here of a $195,000 penalty, what  that 
assumes that all the accounts were replaced."  This calculation was done by the 
Administrator for the purpose of establishing the "projected amount" Ms. 
Pickering would be owed if the accounts were all replaced.  After the district court entered default 
establishing, in effect, that all the accounts were replaced, this evidence was 
sufficient to prove Ms. Pickering's damages.

 
 

[¶38]     
Affirmed.