{Converted to text using OCR. The PDF is the controlling document. JM}
IN THE SUPREME COURT OF THE
STATE OF
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REZA ZANDIAN A/K/A GOLAMREZA ZANDIANJAZI A/K/A GHOLAM REZA ZANDIAN A/K/A REZA JAZI A/K/A J. REZA JAZI A/K/A G. REZA JAZI A/K/A GHONOREZA ZANDIAN JAZI, AN INDIVIDUAL, Appellant,
VS.
JED MARGOLIN, AN INDIVIDUAL, Respondent.
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Case No. 65205 Filed Dec 2 2014 04:32p.m. Tracie K. Lindeman Clerk of Supreme Court |
APPEAL
from the
FIRST JUDICIAL DISTRICT COURT OF THE STATE OF
IN AND FOR
THE HONORABLE JAMES T. RUSSELL, District Judge
APPELLANT'S REPLY BRIEF
JASON WOODBURY
Nevada Bar No. 6870
SEVERIN A. CARLSON
Nevada Bar No. 9373
KAEMPFER CROWELL
510 West Fourth Street
Las Vegas, Nevada 89703
Telephone: (775) 884-8300
Attorneys for Appellant, Reza Zandian
TABLE OF CONTENTS
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TABLE OF AUTHORITIES |
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APPELLANT'S REPLY BRIEF |
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ARGUMENT |
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I. |
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II. ZANDIAN's effort to set aside the Default Judgment was timely |
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III. The District Court's dispositive discovery sanction is a proper subject of this appeal |
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CONCLUSION |
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CERTIFICATE OF COMPLIANCE |
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CERTIFICATE OF SERVICE |
17 |
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TABLE OF AUTHORITIES
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CASES
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Christy v. Carlisle, 94
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1 |
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12, 13 |
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Epstein v. Epstein, 113
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2 |
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Hamlett v. Reynolds,
114 |
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Lindblom v. Prime
Hospitality Corp., 120 |
1,2 |
OTHER AUTHORITIES
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NRAP 28(c) |
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NRCP 8 |
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NRCP 55 |
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NRCP 60 |
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http://www.city-data.com/zipmaps/San-Diego-California.html |
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-ii-
APPELLANT'S REPLY BRIEF
COMES NOW, Appellant, REZA ZANDIAN ("ZANDIAN") by and through his attorneys, KAEMPFER CROWELL, and hereby submits his reply to the Respondent's Answering Brief ("Answering Brief “), filed November 17, 2014 with this Court.[1]
ARGUMENT
I. Nevada law required MARGOLIN to serve ZANDIAN with notice of MARGOLIN's intent to have judgment entered by default, and the failure to provide the required notice renders the judgment in this case void.
The Answering Brief spends only a paragraph responding to the primary defect in this case: the failure to provide a notice of intent to take default.[2] On this point, MARGOLIN first argues:
With regard to the notice of intent to take a default, the notice requirement of NRCP 55 was also fulfilled as Margolin also served written notice of the application for default judgment to Zandian's last known address.[3]
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[1] A reply brief "must be limited to answering any new matter set forth in the opposing brief." NRAP 28(c). Accordingly, only those arguments which were not addressed in Appellant's Opening Brief are addressed herein.
[2] The Answering Brief does not dispute that ZANDIAN had
"appeared" in the case and the notice requirement was thereby
triggered. See NRCP 55(b)(2); Lindblom v. Prime
Hospitality Corp., 120
[3] Answering Br. at 19:9-15 (citing J.A. at Vol. IV, 750).
Page 1 of 17
In other words,
MARGOLIN asserts that
Strict compliance with notice requirements was especially vital in this case where there are numerous procedural irregularities. First, although NRCP 55(b)(2) contemplates a "prove-up hearing" in order to establish the correct amount of damages for judgment, no such hearing was held in this case.[5] The absence of a hearing allowed MARGOLIN's inflated allegations of damage to pass unexamined.[6] More importantly, the decision to forego
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[4] See Lindblom, 120
[5] See Hamlett v. Reynolds, 114
[6] The lack of critical examination is substantiated by the fact that MARGOLIN's Application for Default Judgment; Memorandum of Points and Authorities in Support Thereof requested an award of $1,497,328.90 in damages. See J.A. at Vol. III, 492. However, the Default Judgment -submitted to the District Court by MARGOLIN- awarded a different sum, $1,495,775.74. See J.A. at Vol. III, 541. There is no explanation for the discrepancy. Indeed, all indications are that the difference was the result of a typographical error which went unnoticed.
Page 2 of 17
any hearing repudiated any ability of ZANDIAN to appear and challenge the assertions of MARGOLIN before the Court.
Second, the manner in which MARGOLIN directed the proceedings in this case—whether by intention or by happenstance—created significant confusion. This confusion was compounded by the fact that ZANDIAN was unrepresented by counsel. All of the following took place after ZANDIAN's counsel was allowed to withdraw:
• On May 15, 2012, MARGOLIN moved for an order compelling the Optima Entities to lodge an appearance of counsel.[7]
o MARGOLIN
attempted to serve this document by mail to ZANDIAN at "
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[7] See J.A. Vol. II, 329-33.
[8] See J.A. Vol. II, 333.
[9] See J.A. Vol. II, 308, 320. 92122 appears to
be an existing zip code utilized in
Page 3 of 17
• On June 28, 2012, the District Court issued an order requiring the Optima Entities to lodge an appearance of counsel.[10]
o That
order was sent to ZANDIAN at the "
o On July 2,
2012, MARGOLIN mailed a Notice of Entry of Order utilizing the "
• Next, MARGOLIN applied for the entry of a default, but only against the Optima Entities, not against ZANDIAN.[15]
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[10] See J.A. Vol. II, 334-37.
[11] J.A. Vol. II, 337.
[12] See id.
[13] See id.
[14] J.A. Vol. II, 338-40.
[15] See J.A. Vol. II, 346-53. No notice of intent
to seek default preceded MARGOLIN's application against the Optima Entities.
See Docket Sheet at 6 (Nov. 13, 2014) (Zandian v.
Page 4 of 17
o This document was purportedly served by mail to ZANDIAN utilizing the address "8775 Costa Verde Blvd." in San Diego, California.[16] This time the correct zip code, 92122, was utilized.[17] However, the apartment number was missing.[18]
• After the District Court entered the Default pursuant to
MARGOLIN's application, MARGOLIN served a Notice of Entry of Default[19] to the
"
• Subsequently, on October 30, 2012, MARGOLIN applied for a default judgment against the Optima Entities.[21]
• The day after MARGOLIN's application was filed, the District Court entered Default Judgment against the Optima Entities.[22]
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[16] See J.A. Vol. II, 348
[17] See id.
[18] See id.
[19] See J.A. Vol. II, 361-71.
[20] See J.A. Vol. II, 363.
[21] See Docket Sheet at 6
(Nov. 13, 2014) (Zandian v.
[22] See J.A. Vol. II, 372-74.
Page 5 of 17
• MARGOLIN filed and purported to serve notice of the Default Judgment on November 6, 2012.23
o The notice
was sent to the "
• Next, after the District Court issued its Order Granting Plaintiff's Motion for Sanctions Under NRCP 37 against ZANDIAN, MARGOLIN mailed a copy of the Notice of Entry of Order to three addresses: the "8775 Costa Verde Blvd." address with no apartment number; the same address with an apartment number; and, for the first time, MARGOLIN sent the document to "Alborz Zandian" at "9 Almanzora, Newport Beach, CA 92657-1613.”[25]
• Two and a half months after the District Court struck ZANDIAN's General Denial, MARGOLIN obtained a Default without providing notice and without actually applying for it.[26]
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[23] See J.A. Vol. II, 375-81.
[24] See J.A. Vol. II, 377.
[25] See J.A. Vol. II, 425.
[26] See J.A. Vol. III, 444; Docket Sheet at 5 (Nov.
13, 2014) (Zandian v.
Page 6 of 17
• Although it was later corrected, MARGOLIN's initial Notice of
Entry of Default did not indicate that default had been entered against
ZANDIAN. The initial notice stated, "the Court entered a Default in the
above-referenced matter, against Defendants Optima Technology Corporation, a
• Even though a Default Judgment against the Optima Entities already existed, MARGOLIN applied for a new default judgment against the same Optima Entities and ZANDIAN.[28]
o The Application for Default Judgment; Memorandum of Points and Authorities in Support Thereof was mailed to the aforementioned "8775 Costa Verde Blvd." address with the 92122 zip code and an apartment number, but a new address for ZANDIAN was included on the service list, this one at "8401 Bonita Downs Road, Fair Oaks, CA 95628. "[29] There is no explanation as to how MARGOLIN came to associate this address with ZANDIAN and why it was not utilized in previous
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[27] See J.A. Vol. III, 447.
[28] See J.A. Vol. III, 463-75.
Page 7 of 17
pleadings.[30] Further, the "Alborz Zandian" Newport Beach address which had been previously utilized was abandoned without explanation.
• On June 24, 2013, the District Court granted the second Default Judgment identifying all Defendants, ZANDIAN and the Optima Entities, as judgment debtors.[31]
This veritable conundrum would be difficult enough for experienced litigation counsel to navigate. Left to fend for himself without counsel, the expectation that ZANDIAN could maintain a reasonable understanding of the proceedings is simply not realistic. The multiple, constantly shifting addresses for service, the erroneous zip code, the Default Judgment first against the Optima Entities only and later against all Defendants, serve to create substantial confusion. This case raises significant and serious questions as to ZANDIAN's opportunity to participate. Among others: What happened to those documents which utilized an erroneous zip code?
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[29] J.A. Vol. III, 475.
[30] Of course, at that time, ZANDIAN's actual address was in Paris, France, see Appellant's Opening Br. at 8:17-18; J.A. at Vol. IV, 657, a fact to which MARGOLIN's counsel had ready access. See Appellant's Opening Br. at 9:1-4, 9 n.42; J.A. at Vol. IV, 660.
[31] See J.A. at Vol. III, 540-42. Curiously, the first Default Judgment—against the Optima Entities—has never been vacated or formally addressed in any subsequent proceedings.
Page 8 of 17
To those which did not specify an apartment number? How and when was the apartment number obtained? What association does "Alborz Zandian" have with ZANDIAN? When was that association discovered? Why is "Alborz Zandian" mailed some documents, but not others? How and when was the Fair Oaks address discovered? Did MARGOLIN or MARGOLIN's counsel have any information about ZANDIAN residing in Paris, France?
Of course, a hearing could have addressed these questions. But no hearing was ever held and the assertions of MARGOLIN slid through without meaningful examination. Under these circumstances, at a minimum, MARGOLIN should be held to the basic requirements of Nevada law, one of which is that he serve ZANDIAN with notice of his intent to seek a default judgment.
In his paragraph response to the absence of any notice of intent, MARGOLIN also indicates that,
The District Court also correctly found NRCP 55 was likely not implicated since the judgment ultimately resulted from sanctions arising from Zandian's failure to respond to discovery.[32]
But this mischaracterizes the District Court's action. Perhaps, the District Court could have sanctioned ZANDIAN in the form of a judgment, and thereby subverted the requirements of NRCP 55. But that is not what the
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[32] See Answering Br. at 19:11-15.
Page 9 of 17
District Court actually did. Nor did MARGOLIN request a sanction in that form. Rather, the District Court's Order Granting Plaintiff's Motion for Sanctions Under NRCP 37 merely struck the General Denial of ZANDIAN.[33] The assertion that the District Court could have proceeded differently is not a persuasive argument that procedural rules should therefore be ignored.
For these reasons and for the reasons expressed in the Opening Brief, this Court should reverse the District Court's denial of ZANDIAN's motion to set aside the Default Judgment in this case.
II. ZANDIAN's effort to set aside the Default Judgment was timely.
Even though ZANDIAN's motion to set aside the Default Judgment was filed within the time required by NRCP 60, MARGOLIN claims that it should have been disregarded as untimely. This claim lacks merit.
As a threshold matter, the six month deadline does not apply to ZANDIAN's assertion that the Default Judgment is "void" under NRCP 60(b)(4).[34] But even if it was, there is no evidence—other than
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[33] See J.A. at II, 421-22.
[34] See NRCP 60(b)(4); NRCP 60(b) ("The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than 6 months after the proceeding was taken or the date that written notice of entry of the judgment or order was served.")
Page 10 of 17
MARGOLIN's bare supposition—that ZANDIAN was aware of the Default Judgment prior to discovering it at the end of 2013 when he engaged counsel to challenge it. To be sure, it is possible that a hearing on the Motion to Set Aside may very well have established an adequate record for the District Court to consider and for this Court to review whether ZANDIAN's claimed unawareness was credible or not. ZANDIAN, in fact, requested such a hearing.[35] However, the request was ignored and the District Court proceeded upon the unexamined assumption of MARGOLIN that ZANDIAN was aware of the Default Judgment in spite of the fact that it was never sent to the address of his actual residence. This was error on the part of the District Court and reversal of its denial of ZANDIAN's Motion to Set Aside is required.
III. The District Court's dispositive discovery sanction is a proper subject of this appeal.
MARGOLIN asserts that this Court should decline review of the District Court's discovery sanction in this case because ZANDIAN "has appealed only from the denial of his motion to set aside."[16] But this argument endeavors to divide issues which are inherently and inextricably intertwined. ZANDIAN has challenged the entry of the Default Judgment in
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[35] See J.A. Vol. IV, 662-64.
[36] See Answering Br. at 24:8.
Page 11 of 17
this case. The cause of the Default Judgment was the District Court's imposition of the discovery sanction which struck ZANDIAN's General Denial. To assert that ZANDIAN is entitled to challenge the Default Judgment but not the discovery sanction is to argue that ZANDIAN may challenge only the effect, not the cause.
Further, MARGOLIN's response to the argument lacks merit. Indeed, the case cited in support of their position, Clark County School District v. Richardson Construction,[37] actually supports ZANDIAN's proposition that because the District Court's sanction in this case was dispositive, the "heightened standards" of Young apply. In Richardson Construction, the trial court attempted to impose a discovery sanction which was limited to[38] eliminating one party's affirmative defenses. A sanction limited in this fashion would not be a dispositive sanction. However, in its application of the limited sanction, this Court determined that the trial court exceeded the scope of that limited sanction and effectively struck the party's entire answer.[39] This Court determined that the trial court had abused its discretion in imposing that dispositive sanction.[40]
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[37] 123 Nev. 382, 168 P.3d 87 (2007).
[38] See Richardson Construction, 123 Nev. at 391, 168 P.3d at 93.
[39] See Richardson Construction, 123 Nev. at 392, 168 P.3d at 94 ("Because many of CCSD's stated affirmative defenses were not true NRCP 8(c) affirmative defenses, the court in reality applied a far greater sanction (striking CCSD's answer.")
[40] See id.
Page 12 of 17
Notably, MARGOLIN does not attempt to argue that the District Court in this case complied with the Young requirements -only that Young is inapplicable. But Young controls this case. Young was not addressed in Richardson Construction[41] because the purported sanction was not and was not intended to be dispositive -it only became so in the manner in which it was applied. In contrast, this case involves a sanction which was expressly intended to be dispositive of the case. This distinction between the case at bar and Richardson Construction makes all the difference and clearly establishes that the District Court should have complied with the Young requirements. As there is no dispute that the District Court did not do this, the Default Judgment should be reversed and this Court should remand the case for further proceedings on the merits.
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[41] Young is not even cited in the case.
Page 13 of 17
CONCLUSION
ZANDIAN respectfully requests that this Court reverse the District Court's Default Judgment and remand this case to the District Court for further proceedings on the merits of the case.
DATED this 23rd day of December, 2014.
KAEMPFER CROWELL
BY: ________________________________
JASON D. WOODBURY
Nevada Bar No. 6870
SEVERIN A. CARLSON
Nevada Bar No. 9373
510 W. Fourth Street
Carson City, Nevada 89703
Telephone:(775) 884-8300
Facsimile: (775) 882-0257
Attorneys for Appellant,
REZA ZANDIAN
Page 14 of 17
CERTIFICATE OF COMPLIANCE
1. I hereby certify that this brief complies with the formatting requirements of NRAP 32(a)(4), the typeface requirements of NRAP 32(a)(5) and the type style requirements or NRAP 32(a)(6) because:
[X] This brief has been prepared in a proportionally spaced typeface using Microsoft Word 2003 in 14 point Times New Roman font; or
[ ] This brief has been prepared in a monospaced typeface using [state name and version of word processing program] with [state number of characters per inch and name of type style].
2. I further certify that this brief complies with the page or type-volume limitations of NRAP 32(a)(7) because, excluding the pasts of the brief exempted by NRAP 32(a)(7)(c), it is either:
[X] Proportionally spaced, has a typeface of 14 points or more and contains 2,383 words; or
[ ] Monospaced, has 10.5 fewer characters per inch, and contains words or lines of text; or
[ ] Does not exceed pages.
3. Finally, I hereby certify that I have read this appellate brief, and to the best of my knowledge, information, and belief, it is not frivolous or interposed for any improper purpose. I further certify that this brief
Page 15 of 17
complies with all applicable Nevada Rules of Appellate Procedure, in particular NRAP 28(e)(1), which requires every assertion in the brief regarding matters in the record to be supported by a reference to the page and volume number, if any, of the transcript or appendix where the matter relied on is to be found. I understand that I may be subject to sanctions in the event that the accompanying brief is not in conformity with the requirements of the Nevada Rules of Appellate Procedure.
DATED this 23rd day of December, 2014.
__________________________
JASON D. WOODBURY
Nevada Bar No. 6870
SEVERIN A. CARLSON
Nevada Bar No. 9373
KAEMPFER CROWELL
510 West Fourth Street Carson City , NV 89703
Page 16 of 17
CERTIFICATE OF SERVICE
Pursuant to NRAP 25(l), I declare that I am an employee of Kaempfer Crowell and on this 23rd day of December, 2014, I served a copy of the foregoing Appellant's Reply Brief by Nevada Supreme Court CM/ECF Electronic Filing to:
Adam P. McMillen
WATSON ROUNDS
5371 Kietzke Lane
Reno, NV 89511
____________________________
Employee of Kaempfer Crowell
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