Court Opinion

ID: 6104478
Source: CourtListenerOpinion
Date Created: 2022-01-19 11:08:07.92404+00
Date Added: 2024-06-11T08:53:44.328006
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                SUREFUNDING, LLC, A DELAWARE           No. 81639
                LIMITED LIABILITY COMPANY,
                Appellant,
                vs.
                BRETT HATTON, AN INDWIDUAL;
                EARL CORONEL, AN INDIVIDUAL;
                                                       F8LRD
                AUTUMN WIND GLOBAL MULTI-               JAN 1 3 2022
                STRATEGIES FUND, LP, A
                                                       EL2A2 1 k BROWN
                DELAWARE LIMITED PARTNERSHIP;        CLE
                                                              PREME COURT

                DAMON GERSH, AN INDIVIDUAL;           It/De -•«Si(
                JASON ECKENROTH, AN
                INDIVIDUAL; SHERRI R. SANDS, AS
                TRUSTEE OF THE SHERRI R. SANDS
                REVOCABLE TRUST, A FLORIDA
                TRUST; GLICKFIELD CAPITAL
                MANAGEMENT, LLC FBO M.
                GLICKFIELD DYNASTY TRUST, A
                MARYLAND TRUST; GLICKFIELD
                CAPITAL MANAGEMENT, LLC FBO
                CHERYL NEWMARK, A MARYLAND
                TRUST; GLICKFIELD CAPITAL
                MANAGEMENT, LLC.11130 MARLA
                SCHRAM, A MARYLAND TRUST;
                CARRICKFERGUS INVESTMENTS
                LIMITED, A BRITISH VIRGIN
                ISLANDS COMPANY; STEPHANIE
                CARNOT, AS TRUSTEE OF THE
                CARNOT FAMILY TRUST, A DISTRICT
                OF COLUMBIA TRUST; DORSEY AND
                WHITNEY TRUST CO., LLC, AS
                TRUSTEE OF THE DYLAN TAYLOR
                2011 GRANTOR TRUST, A SOUTH
                DAKOTA TRUST: ESECO. LLC, A
                MICHIGAN LIMITED LIABILITY
                COMPANY; SEQURIS GROUP, LLC, A
                MICHIGAN LIMITED LIABILITY
                COMPANY; MATTHEW BRIGGS, AS
                TRUSTEE OF THE BRIGGS
SUPREME COURT
     OF
      NEVADA

(ol 19,47A                                           -72   _0128Z
 MANAGEMENT TRUST: MICHAEL
 RUBENSTEIN, AN 1ND1V DUAL;
 JUNE FARMER, AN INDIVIDUAL;
 THOMAS CARL MYERS, AN
 INDIVIDUAL; RICHARD L. ROGERS,
 AN INDIVIDUAL; NEAL J.
 GLICKFIELD, AS TRUSTEE OF THE
 NEAL J. GLICKFIELD 2018 TRUST, A
 MARYLAND TRUST; LINEAGE, LLC, A
 VIRGINIA LIMITED LIABILITY
 COMPANY; CHARLES B. CHOKEL, AS
 TRUSTEE OF THE CHARLES B.
 CHOKEL TRUST U/A 4/21/92, A NEW
 HAMPSHIRE TRUST; BRIAN GRAY,
 AN INDIVIDUAL; HFJ INVESTMENTS
 I, LLC, A TEXAS LIMITED LIABILITY
 COMPANY; PATRICIA B. JONES, AS
 TRUSTEE OF THE PATRICIA B.
 JONES REVOCABLE TRUST, A
 MARYLAND TRUST; JOHN B. SHAW,
 AS TRUSTEE OF THE JOHN B. SHAW
 2012 FAMILY GRANTOR TRUST; AND
 1086 LLC, A MARYLAND LIMITED
 LIABILITY COMPANY,
 Respondents.

                 ORDER OF REVERSAL AND REMAND

            This is an appeal from an order appointing a receiver. Eighth
Judicial District Court, Clark County; Mark R. Denton, Judge.
            Appellant SureFunding, LLC, an investment firm, lost millions
of dollars it invested into a foreign company that was later discovered to be
a Ponzi scheme. Respondents are a subset of SureFunding's noteholders
who are granted a senior secured priority interest with respect to their

      'We do not recount the facts except as necessary to our disposition.

                                      2
                      collateral per the Third Amendment to the Note Purchasing Agreement
                      (TNPA).
                                  Respondents sued SureFunding, alleging a breach of the TNPA
                      due to SureFunding improperly investing funds in the Ponzi scheme.
                      Respondents thereafter moved for appointment of a receiver, alleging that
                      SureFunding was not acting in the best interest of the creditors. The
                      district court granted respondents motion and appointed a receiver of
                      respondents' choice. Sure-Funding moved to vacate the receivership order,
                      and the district court denied the motion. This appeal followed.
                      Respondents lacked standing to bring their claim,
                                  SureFunding contends that respondents lack standing to bring
                      their breach of contract claim, and therefore lack standing to pursue the
                      appointment of a receiver. because the TNPA bars an action brought
                      without the consent of all Key Purchasers, and one Key Purchaser has not
                      joined the suit against SureFunding.
                                  Whether a party has standing is a question of law we review de
                      novo. Arguello v. Sunset Station, Inc., 127 Nev. 365, 368, 252 P.3d 206, 208
                      (2011). And, we review a district court's interpretation of a contract de novo.
                      May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005).
                                  A plaintiff has the burden of proving that it has standing to
                      assert its claims.   Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992).
                      "[S]tanding requires that a plaintiff have suffered an 'injury in face that is
                      not merely conjectural or hypothetical." Miller v. Ignacio, 112 Nev. 930, 936
                      n.4, 921 P.2d 882, 885 n.4 (1996) (citing to Lujan, 504 U.S. at 560.); Anya
                      Bernstein, The Hidden Costs of Terrorist Watch Lists, 61 Buff. L. Rev. 461,
                      510 (2013) (standing requires "an actual or imminent concrete harm.").
                      However, this court will enforce a contract as written if the language of the
                      contract is clear and unambiguous. Am. First Fed. Credit Union v. Soro,
SUPREME COURT
        OF
     NEVADA

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l(ì) 1947A 44SPIPE,

                                                                          '
                                                                                                -,
 131 Nev. 737, 739, 359 P.3d 105, 106 (2015). And we will not disturb a
 contract between parties unless the agreement is "unconscionable, illegal,
 or in violation of public policy." Rivero v. Riuero, 125 Nev. 410, 429, 216
 P.3d 213, 226 (2009).
              The TNPA distinguishes two groups of investors. First, the
 TNPA labels noteholders who have an aggregate principal amount of at
 least two million dollars as Key Purchasers. Second, the TNPA describes
 the holders of a majority of the outstanding principal amount, including
 each Key Purchaser, as Required Purchasers. The TNPA vests the
' authority to initiate action with respect to the collateral funds to a
 Collateral Agent, who is required to seek approval from the Required
 Purchasers before initiating any action under the TNPA. After the
 Collateral Agent resigned in 2019, the Required Purchasers elected not to
 appoint a new one. As a result, the Required Purchasers thereafter held
 the rights and obligations of the Collateral Agent under the TNPA. It is
 undisputed that respondents hold the majority of SureFunding's
 outstanding debt and include all but one Key Purchaser.
              We conclude that respondents do not have standing to bring
 their claim. After the Collateral Agent resigned, the Required Purchasers
 acted as the de facto Collateral Agent per the TNPA. As such, the Required
 Purchasers were obligated to acquire the assent of every Key Purchaser to
 initiate any action under the TNPA with respect to their collateral.2 While

       2 0nappeal, respondents contend for the first time that they are not
 bound by the TNPA because the record copy of that document is unsigned.
 However, respondents did not raise this issue with the district court, so we
 consider it waived. See Old Aztec Mine, Inc. v. Brown, 97 Nev. 49, 52, 623
 P.2d 981, 983 (1981) CA point not urged in the trial court, unless it goes to
                                                   continued on next page...

                                      4
                respondents hold a majority of SureFunding's principal, they are missing
                one Key Purchaser. Therefore, under the TNPA, respondents may not
                initiate a breach of contract with respect to the collateral.
                              Because respondents do not have standing to bring their
                substantive tort law claim, they are therefore barred from seeking the
                appointment of a receiver; NRS 32.010 only permits a district court to
                appoint a receiver where "an action is pending." See Hines v. Plante, 99
                Nev. 259, 262, 661 P.2d 880, 882 (1983) (explaining that a party seeking a
                receivership must show that it is likely that it would be entitled to a
                judgment in the underlying action). The parties freely contracted to include
                this limitation, and respondents do not allege that the TNPA is otherwise
                unconscionable, illegal, or in violation of public policy. See Rivero, 125 Nev.
                at 429, 216 P.3d at 226 (2009).3 Accordingly, we
                              ORDER the judgment of the district court REVERSED AND
                REMAND this matter to the district court for proceedings consistent with
                this order.

                                                                    , J.
                                           Hardesty

                      Aligy;4— 0
                Stiglich                                    Herndon

                the jurisdiction of that court, is deemed to have been waived and will not be
                considered on appeal.").

                      31n light of this resolution, we need not reach the other arguments
                raised by the parties on appeal.
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        OF
     NEVADA
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                                   4 -.4
                                           - c4141- •
                        cc:   Hon. Mark R. Denton, District Judge
                              Paul M. Haire, Settlement Judge
                              Snell & Wilmer, LLP/Las Vegas
                              Brownstein Hyatt Farber Schreck, LLP/Las Vegas
                              Blank Rome LLP/Chicago
                              Eighth District Court Clerk

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         OF
      NEVADA

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( 01 1947A    r4M41,•

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