Opinion ID: 2521676
Heading Depth: 1
Heading Rank: 7

Heading: Damages awarded to Yang and Chai

Text: At the NRCP 55(b)(2) prove-up hearing, the district court awarded compensatory damages of $15,000,000 to Yang and Chai, individually. However, we conclude that the district court committed error when it awarded compensatory damages to Yang and Chai because the award was duplicative, and even if it was not duplicative, Yang and Chai did not present substantial evidence to support the amount of damages sought. [8] At the outset, we reject Foster's and Cochrane's argument that damages awarded to Yang and Chai were improper because Yang and Chai did not demonstrate that they could prevail on the merits at trial. Where default is entered as a discovery sanction, the nonoffending party is not required to prove likelihood of success on the merits; rather, it is only required to prove a prima facie case to support its claims. See Young v. Johnny Ribeiro Building, 106 Nev. 88, 94, 787 P.2d 777, 781 (1990). The claims under which Yang and Chai sought individual recovery were not clearly set forth in either their second amended complaint or at the prove-up hearing, at which only Yang testified; however, it appears that Yang and Chai sought to recover individually for either intentional or negligent misrepresentation, alleging that they were wrongfully induced by Dornan, Foster, and Cochrane into selling or transferring their stock. At the prove-up hearing, Yang was asked what relief he and Chai sought for their misrepresentation claim. Yang and Chai principally sought declaratory judgmentthe reinstatement of their stock ownership and the cancellation of Dornan's, Foster's, and Cochrane's stockwhich the district court granted. Yang and Chai did not plainly seek monetary damages under that cause of action. Therefore, by awarding both declaratory reliefthe reinstatement of Yang and Chai's stockand monetary relief$15,000,000we conclude that the award resulted in duplicative recovery for a single cause of action. Even if the award was not duplicative, Yang and Chai did not present sufficient evidence to establish a prima facie case for intentional or negligent misrepresentation. See Nelson v. Heer, 123 Nev. 217, 225, 163 P.3d 420, 426 (2007) (providing the elements of intentional misrepresentation: (1) a false representation that is made with either knowledge or belief that it is false ..., (2) an intent to induce another's reliance, and (3) damages that result from this reliance); Barmettler v. Reno Air, Inc., 114 Nev. 441, 449, 956 P.2d 1382, 1387 (1998) (providing that one who, without exercising reasonable care or competence, supplies false information for the guidance of others in their business transactions is liable for pecuniary loss caused to them by their justifiable reliance upon the information). Both causes of action require a showing that damages resulted from the tortious misrepresentations. Nelson, 123 Nev. at 225, 163 P.3d at 426; Barmettler, 114 Nev. at 449, 956 P.2d at 1387. And although default was entered in this case and the pleadings were deemed admitted, see Estate of LoMastro v. American Family Ins., 124 Nev. ___, ___ n. 14, 195 P.3d 339, 345 n. 14 (2008), the admission of the pleadings did not relieve Yang and Chai of their responsibility to show that they were entitled to relief and that the amount of damages sought corresponded with the asserted causes of action. In other words, because both intentional and negligent misrepresentation require a showing that the claimed damages were caused by the alleged misrepresentations, Nelson, 123 Nev. at 225, 163 P.3d at 426; Barmettler, 114 Nev. at 449, 956 P.2d at 1387, it was not sufficient for Yang and Chai to merely assert the fact that they were damaged without showing substantial evidence that the amount of damages sought were both attributed to the tortious misrepresentation and intended to compensate Yang and Chai for the harm caused by the misrepresentation. See Miller v. Schnitzer, 78 Nev. 301, 309, 371 P.2d 824, 828 (1962), abrogated on other grounds by Ace Truck v. Kahn, 103 Nev. 503, 508, 746 P.2d 132, 135-36 (1987), abrogated on other grounds by Bongiovi v. Sullivan, 122 Nev. 556, 582-83, 138 P.3d 433, 451-52 (2006). Therefore, because the award was duplicative, and because Yang did not present substantial evidence to show that $15,000,000 the amount of damages awardedwas related to the harm caused, we reverse the award of compensatory damages to Yang and Chai.