Court Opinion

ID: 8213386
Source: CourtListenerOpinion
Date Created: 2022-10-12 10:07:57.331187+00
Date Added: 2024-06-11T16:42:22.509154
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                 JAY BLOOM, AN INDIVIDUAL,                              No. 84704
                 Petitioner,
                 vs.
                 THE EIGHTH JUDICIAL DISTRICT
                 COURT OF THE STATE OF NEVADA,
                                                                         FILF13-
                 IN AND FOR THE COUNTY OF                                OCT ll 2022
                 CLARK; AND THE HONORABLE                               LILLZASE A. SF.OWN
                                                                                PiREW COURT
                 MARK R. DENTON, DISTRICT JUDGE,                      CLER    F

                 Respondents,                                                    CLERK

                 and
                 TGC/FARKAS FUNDING, LLC,
                 Real party in Interest.

                                      ORDER DENYING PETITION
                            This original petition for a writ of mandamus challenges district
                court orders finding petitioner in contempt and awarding attorney fees as a
                sanction.
                            Petitioner Jay Bloom is the manager of First 100, LLC. In
                November 2020, the district court entered an order confirming an
                arbitration award and directing First 100 to provide certain business
                records to real party in interest TCC/Farkas Funding, LLC (TGC)
                consistent with the arbitration award. When First 100 failed to do so, the
                district court entered an order in April 2021 holding both First 100 and

                      "Although petitioner has alternatively requested a writ of prohibition,
                he has not explained how such relief would be proper. See Las Vegas Sands
                Corp. u. Eighth Judicial Dist. Court, 130 Nev. 643, 649, 331 P.3d 905, 909
                (2014) (recognizing that a writ of prohibition is appropriate when a district
                court exceeds its jurisdiction).

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                Bloom in contempt for failing to comply with the November 2020 order.2 As
                its bases for holding Bloom in contempt, the district court found that Bloom
                was both (1) First 100's alter ego and (2) First 100's "responsible party."
                Thereafter, the district court entered an order in June 2021 holding First
                100 and Bloom jointly and severally liable for TGC's attorney fees as a
                sanction for their contempt.
                             In his writ petition, Bloom challenges the district court's April

                2021 contempt order and its June 2021 sanctions order. In particular, he
                contends that neither of the district court's two alternative bases for finding
                him in contempt (and thereafter sanctioning him) was proper.
                             We need not address the district court's alter ego finding

                because we conclude that its "responsible party" finding was neither an
                arbitrary nor capricious exercise of discretion. Cf. Int'l Game Tech., Inc. v.
                Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) ("A
                writ of mandamus is available to compel the performance of an act that the
                law requires as a duty resulting from an office, trust, or station or to control
                an arbitrary or capricious exercise of discretion."); see also Detwiler v.
                Eighth Judicial Dist. Court, 137 Nev. 202, 206, 486 P.3d 710, 715 (2021)
                ("Whether a person is guilty of contempt is generally within the particular
                knowledge of the district court, and the district court's order should not
                lightly be overturned. . . . Accordingly, this court normally reviews an order
                of contempt for abuse of discretion." (internal quotation marks, citations,

                      2The district court did so after holding a two-day evidentiary hearing
                at which Bloom testified.

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                and alterations omitted)). As recognized by the district court in its April
                2021 contempt order:
                                   The "responsible party" rule is longstanding,
                             providing that the contempt powers of the Courts
                             reach through the corporate veil to command not
                             only the entity, but those who are officially
                             responsible for the conduct of its affairs. If a person
                             is apprised of the Order directed to the entity,
                             prevents compliance or fails to take appropriate
                             action within their power for the performance of the
                             corporate duty, they are guilty of disobedience and
                             may be punished for contempt.

                See, e.g., Wilson v. United States, 221 U.S. 361, 376 (1911) (recognizing the
                concept of the responsible-party rule); Elec. Workers Pension Tr. Fund of
                Local Union #58 IBEW        Gary's Elec. Serv. Co., 340 F.3d 373, 382 (6th Cir.

                2003) (same); United States v. Laurins, 857 F.2d 529, 535 (9th Cir. 1988)
                (same); Luu N' Care, Ltd. v. Laurian, 2019 WL 4279028, at *4 (D. Nev. Sept.
                10, 2019) (same).
                             Bloom contends that the district court's responsible-party
                finding was erroneous either because (1) cases applying the responsible-
                party rule are nonbinding or (2) he was not actually First 100's "responsible
                party." We reject Bloom's first argument because although this court has
                not yet formally adopted the responsible-party rule, we find the cases
                applying that rule to be persuasive, and Bloom has not explained why
                refusing to recognize the rule would be good policy.3           Bloom's second

                      3Nor  does Bloom's reliance on NRS 86.371 change our decision. That
                statute simply provides that an LLC's manager "is [not] individually liable
                for the debts or liabilities of the company" unless the articles of organization
                provide for such liability. Here, the district court did not hold Bloom liable

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                argument is premised on the assertion that the at-issue business records
                were in the possession of First 100's former controller and, despite Bloom
                being the sole manager of First 100, he could not compel the former
                controller to produce the records. We are not persuaded that the district
                court clearly erred in rejecting this argunient, given that Bloom's own
                testimony at the evidentiary hearing demonstrates that the former
                controller would have produced the documents if he were paid for his time.4
                Although Bloom alluded in his testimony to First 100 not having the
                financial resources to do so, the district court was within its discretion to
                either disregard this testimony or find that it did not change Bloom's status
                as First 100's responsible party.5   Cf. Ellis v. Carucci, 123 Nev. 145, 152,
                161 P.3d 239, 244 (2007) ("[W]e leave witness credibility determinations to
                the district court and will not reweigh credibility on appeal.").

                for any debt or liability of First 100. Rather, it held him in contempt for
                violating a court order and sanctioned him accordingly.

                      4Bloom contends that First 100's Operating Agreement requires a
                person requesting books and records to pay for them and "that no court
                order says [TGC] is absolved from having to pay for the production of the
                books and records." This contention is belied by the district court's
                November 2020 order, which in no uncertain terms "absolved" TGC of that
                responsibility.

                      5 Notably, First 100 was able to post a roughly $150,000 supersedeas
                bond to cover the sanction award. Both parties agree that after the previous
                related appeals were resolved in Docket Nos. 82794 and 83177, this bond
                was released and only $1,606.85 of the sanction award remained unsatisfied
                (representing accrued interest). TGC contends that, in light of the bond's
                release, this writ petition is moot. While this argument is well-taken, we
                nevertheless entertain this petition because Bloom continues to challenge
                his liability for the remaining $1,606.85.

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                             In sum, we are not persuaded that the district court abused its
                discretion in holding Bloom in contempt under a responsible-party theory
                and in subsequently holding him liable for the contempt sanctions. We
                therefore
                             ORDER the petition DENIED.6

                                          arraguirre

                                                                                    , Sr.J.
                Herndon

                cc:   Mark R. Denton, District Judge
                      Maier Gutierrez & Associates
                      Garman Turner Gordon
                      Eighth District Court Clerk

                      6The   Honorable Mark Gibbons, Senior Justice, participated in the
                decision of this matter under a general order of assignment.

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