8 Mine, LLC v. The Eljen Group, LLC

District Court, D. Nevada·Decided July 14, 2021·No. 3:18-cv-00104·Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 NO. 8 MINE, LLC, Case No.: 3:18-cv-00104-WGC

4 Plaintiff Order

5 v. Re: ECF No. 184

6 THE ELJEN GROUP, LLC, et. al.,

7 Defendants _____________________________________ 8 THE ELJEN GROUP, LLC, et. al. 9 Counter-Plaintiffs 10 v. 11 NO. 8 MINE, LLC 12 Counter-Defendant 13 ______________________________________

14 THE ELJEN GROUP, et. al.,

15 Third Party Plaintiffs

16 v.

17 DAVID TACKETT, et. al.,

18 Third Party Defendants

19 ________________________________________

20 Defendants/Counter-Plaintiffs/Third-Party Plaintiffs the Eljen Group, LLC, Elven E. 21 Jennings, Jack Elkins, Frank Lente and Steve Harper (collectively, the Eljen Parties) move for an 22 award of attorney’s fees under: (1) Nevada Revised Statute (NRS) 18.010(2)(b), (2) NRS 23 41.1395, (3) by contract, as provided in the promissory note executed by No. 8 Mine, LLC in 1 favor of Jack Elkins and Steve Harper, and (4) Nevada Rule of Civil Procedure 68(f). In 2 addition, they argue that they are entitled to costs under NRS 18.005 and 18.020. (ECF Nos. 184, 3 184-1 to 184-8.) Tackett filed a belated response (ECF No. 216), and the court exercises its 4 discretion to consider the response. The Eljen Parties filed a reply. (ECF No. 218.)

5 I. BACKGROUND 6 This dispute stems from several agreements to purchase No. 8 turquoise. 7 On May 7, 2020, the court dismissed No. 8 Mine, LLC’s and Tackett’s Second Amended 8 Complaint/Counterclaims and struck their answer to the Eljen Parties’ pleading as a sanction 9 under Federal Rule of Civil Procedure 37, Local Rule IA 11-8, and the court’s inherent power. 10 (ECF No. 160.) No. 8 Mine/Tackett filed a motion seeking reconsideration of that order, which 11 the court denied. (ECF Nos. 169, 174.) The Eljen Parties filed a motion for damages and other 12 relief (ECF Nos. 163-168), and the court issued an order finding Tackett to be the alter ego of 13 No. 8 Mine and entered judgment in favor of the Eljen Parties. (ECF Nos. 176, 177, 178, 179.)1 14 The Eljen Parties now seek an award of attorney’s fees under Nevada Revised Statute

15 (NRS)18.010(2)(b), NRS 41.1395, the promissory note entered into with Elkins, Lente and 16 Harper, and Nevada Rule of Civil Procedure 68. They also seek an award of costs under 17 NRS 18.005 and 18.020. 18 II. DISCUSSION 19 Under the “American Rule,” litigants generally must pay their own attorney’s fees in the 20 absence of a rule, statute, or contract authorizing such award. Alyeska Pipeline Co. v. Wilderness 21 22

23 1 The court subsequently granted Tackett’s motion for late filing of notice of appeal, and the judgments were vacated and re-entered on July 7, 2021. (ECF Nos. 219, 220, 221, 222.) 1 Society, 421 U.S. 240, 247 (1975); MRO Comm., Inc. v. Am. Tel. & Tel. Co., 197 F.3d 1276, 2 1280-81 (9th Cir. 1999). 3 “In an action involving state law claims, [federal courts] apply the law of the forum state 4 to determine whether a party is entitled to attorney’s fees, unless it conflicts with a valid federal

5 statute or procedural rule.” MRO Comm., 197 F.3d at 1282 (alteration original). 6 A. NRS 18.010(2)(b)—The Eljen Parties 7 The Eljen Parties seek the recovery of fees in the amount of $155,684.25 under 8 NRS 18.010. 9 A court may award attorney’s fees to the prevailing party when “the court finds that the 10 claim, counterclaim, cross-claim or third-party complaint or defense of the opposing party was 11 brought or maintained without reasonable ground or to harass the prevailing party.” 12 NRS 18.010(2)(b). 13 It is the intent of the Legislature that the court award attorney’s fees pursuant to this paragraph and impose sanctions pursuant to 14 Rule 11 of the Nevada Rules of Civil Procedure in all appropriate situations to punish for and deter frivolous or vexatious claims and 15 defenses because such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious 16 claims and increase the costs of engaging in business and providing professional services to the public. 17 Id. 18 The fact that the claim did not prevail, or even the fact that the claim was determined to 19 be without merit alone is insufficient for a determination that sanctions are warranted. See Rivero 20 v. Rivero, 216 P.3d 213, 234, 125 Nev. 410, 441 (2009). 21 There is no question that when the Eljen Parties obtained dismissal of No. 8 22 Mine/Tackett’s pleadings and the entry of monetary judgments in their favor that they achieved 23 prevailing party status. See Klamath Siskiyou Wildlands Ctr. v. U.S. Bureau of Land Mgmt., 589 1 F.3d 1027, 1030 (9th Cir. 2009). The question then is whether No. 8 Mine/Tackett’s pleadings 2 were brought or maintained without reasonable ground or to harass the Eljen Parties. 3 The Eljen Parties argue that No. 8 Mine/Tackett’s claims are premised on the allegation 4 that No. 8 Mine/Tackett paid Mr. Jennings in full for the No. 8 turquoise, but they knew this was

5 not true when they filed their complaint. They point to a December 30, 2017 writing where 6 Tackett said that he would pay Jennings $10,000 per month until he was paid in full pursuant to 7 the agreement to purchase the turquoise for $1.5 million. He said that for the delay on the silver 8 he would pay an extra $200,000 at $2000 per month until paid or whenever half of the turquoise 9 was sold, whichever was sooner. (Citing ECF No. 176 at 9, ECF No. 166-3.) This was four 10 weeks before No. 8 Mine filed its complaint on February 2, 2018. 11 In addition, the Eljen Parties claim that No. 8 Mine/Tackett knew when they filed the 12 complaint that Argent Asset Group had re-wired $230,000 of the purchase money back to 13 Tackett on September 1, 2017, which he used to buy a house in Florida. (Citing ECF No. 176 at 14 16.) Tackett claimed he bought the house for Jennings’ benefit. (Citing ECF No. 136 at 2-5.)

15 The Eljen Parties further assert that Tackett was aware that Argent Asset Group delivered 16 to him 181 100-ounce bars of silver with a value over $300,000 that were earmarked for payment 17 to Jennings. Instead of delivering these 181 bars of silver to Jennings, Tackett sold them to third 18 parties and retained the proceeds. (Citing ECF No. 176 at 11.) 19 A finding that a claim or defense was brought or maintained without reasonable ground 20 or to harass the prevailing party must be supported by evidence in the record. See Semenza v. 21 Caughlin Crafted Homes, 901 P.2d 684, 687, 111 Nev. 1089, 1095 (1995) (citing Chowdry v. 22 NLVH, Inc., 851 P.2d 459, 464, 109 Nev. 478, 486 (1993)).

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