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Ilani v. Abraham

United States District Court, D. Nevada

July 5, 2018

EZRA ILANI and CATHY ILANI, Plaintiffs,
v.
SIMON S. ABRAHAM, et al., Defendants.

          ORDER GRANTING MOTIONS FOR PUNITIVE DAMAGES AND FOR ATTORNEYS' FEES (ECF NOS. 56, 57)

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE

         Plaintiffs Ezra and Cathy Hani move for an award of punitive damages against defendants Simon S. Abraham and KDA Holdings, LLC. ECF No. 56. The Ilanis also move for an award of some of their attorneys' fees against Abraham and KDA. ECF No. 57. Abraham and KDA did not oppose either motion, which constitutes grounds for granting the motion for punitive damages. See Local Rule 7-2(d) ("The failure of an opposing party to file points and authorities in response to any motion, except... a motion for attorney's fees, constitutes a consent to the granting of the motion."). More importantly, both motions are supported by good cause. Therefore, I grant them.

         A. Punitive Damages

         In determining whether to grant punitive damages, courts "consider numerous factors including the defendant's financial position, culpability, and the extent to which this culpability offends one's sense of justice, ... the gravity of the injury suffered by the plaintiff and the means necessary to deter future similar conduct." Evans v. Dean Witter Reynolds, Inc., 5 P.3d 1043, 1053 (2000) (citations omitted). Although allegations of fact in a complaint are deemed admitted upon entry of default, an award of punitive damages must be based on more than those allegations.

A plaintiff is never entitled to punitive damages as a matter of right; an award of punitive damages requires clear and convincing evidence of fraud, malice, or oppression. When punitive damages are sought by default judgment, the court must have independent evidence to support the award because punitive-damages-worthy conduct alleged in a complaint is not regarded as admitted by default.

Alutiiq Int'lSols., LLC v. OIC Marianas Ins. Corp., 149 F.Supp.3d 1208, 1215 (D. Nev. 2016) (quotation and citations omitted).

         Here, the plaintiffs' motion and my prior orders detail the fraudulent acts committed by Abraham and KDA. I need not repeat them here. The plaintiffs offer declarations, documents, and other evidence to corroborate their allegations and support their request for punitive damages. The defendants' fraudulent activities were complex and well-orchestrated to hide their true nature from the plaintiffs. The defendants developed and took advantage of the plaintiffs' trust through mutual connections. The plaintiffs depleted their entire savings and other accounts and depleted their children's college funds. The evidence of the defendants' fraud, malice, and oppression is clear, convincing, and corroborated. Their actions offend my sense of justice, and I believe I am not alone in that thought. The plaintiffs have no evidence about the defendants' financial positions because the defendants have not participated in this case or discovery. The plaintiffs have suffered serious economic injury, and a large punitive damages award should help deter the defendants and others from engaging in such fraudulent activities in the future. I award punitive damages of three times the amount of compensatory damages I previously awarded.[1]

         B. Attorneys' Fees

         Previously, I set aside the original entry of default judgment against Abraham and KDA, conditioned in part upon their reimbursing the Ilanis the attorneys' fees they incurred in connection with entry of the default judgment. ECF NO. 47. After the defendants failed to satisfy the conditions I had imposed, I reinstated the default judgment and permitted the Ilanis to again seek their attorneys' fees. They now move for an award of their fees incurred in connection with the original default judgment and the reinstatement.

         "If state substantive law governs a case, then an award of attorney fees is also governed by state law." Muniz v. United Parcel Serv., Inc., 738 F.3d 214, 218 (9th Cir. 2013). Under Nevada law, "attorney's fees are only available when authorized by a rule, statute, or contract." Flamingo Realty, Inc. v. Midwest Dev., Inc., 879 P.2d 69, 73 (Nev. 1994) (quotation omitted).

         The reasonableness of an attorneys' fee award is also determined by state law when a federal court is sitting in diversity. Mangold v. Cal. Pub. Util. Comm 'n, 67 F.3d 1470, 1478 (9th Cir. 1995). In Nevada, "the method upon which a reasonable fee is determined is subject to the discretion of the court, which is tempered only by reason and fairness." Shuette v. Beazer Homes Holdings Corp., 124 P.3d 530, 548-49 (Nev. 2005) (en banc) (quotation omitted). One permissible method of calculation is the lodestar approach, which involves multiplying "the number of hours reasonably spent on the case by a reasonable hourly rate." Id. at 549 & n.98 (quotation omitted). In most cases, the lodestar figure is a presumptively reasonable fee award. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008).

         In determining the reasonableness of a fee request, I am guided by the factors listed in Brunzell v. Golden Gate National Bank:

(1) the qualities of the advocate: his ability, his training, education, experience, professional standing and skill; (2) the character of the work to be done: its difficulty, its intricacy, its importance, time and skill required, the responsibility imposed and the prominence and character of the parties where they affect the importance of the litigation; (3) the work actually performed by the lawyer: the skill, time and attention given to the work; (4) the result: whether the attorney was successful and what benefits were derived.

455 P.2d 31, 33 (Nev. 1969); see also Haley v. Dist. Ct,273 P.3d 855, 860 (Nev. 2012) ("[I]n determining the amount of fees to award, the court is not limited to one specific approach; its analysis may begin with any method rationally designed to calculate a reasonable amount, so long as the requested amount is reviewed in light ...


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