Skarpelos v. Weiser Asset Mgmt., Ltd. C/W 79526 ( 2022 )

IN THE• SUPREME COURT OF THE STATE OF NEVADA
ATHANASIOS SKARPELOS, AN No. 79425
INDIVIDUAL,
Appellant,
vs.
FILED
WEISER ASSET MANAGEMENT, LTD.,
A BAHAMAS COMPANY; AND WEISER
(BAHAMAS) LTD., A BAHAMAS
COMPANY,
Res • ondents.
WEISER ASSET MANAGEMENT, LTD., No. 79526
A BAHAMAS COMPANY; AND WEISER
(BAHAMAS) LTD., A BAHAMAS
COMPANY,
Appellants,
vs.
ATHANASIOS SKARPELOS, AN
INDIVIDUAL,
Respondent.
ORDER AFFIRMING IN PART, REVERSING IN PART AND
REMANDING
These consolidated appeals stem from a civil interpleader
action involving competing claims of ownership to a stock certificate
representing disputed shares of a pharmaceutical company by
appellant/respondent Athanasios Skarpelos and respondents/appellants
Weiser Asset Management, Ltd. (WAM) and Weiser (Bahamas) Ltd.
(collectively, Weiser). Second Judicial District Court, Washoe County;
Elliott A. Sattler, Judge.
In 2009, Anavex Life Sciences Corporation issued stock
certificate no. 753 (the disputed stock) to Skarpelos. In 2011, Skarpelos
funded .a WAM brokerage account with the disputed stock certificate. In
2013, Skarpelos had the stock certificate voided and had a new certificate
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issued to him. Weiser contended that, shortly thereafter, it sold the
disputed stock shares and credited Skarpelos with the $249,580 paid for the
shares. When Skarpelos failed to provide the shares, Weiser contacted the
company that issued the stock certificate, Nevada Agency and Transfer
Company (NATCO), and demanded it put the stock certificate in Weiser's
name.
NATCO filed an interpleader action against Skarpelos and
Weiser to establish ownership of the disputed stock. Skarpelos and Weiser
filed crossclaims against each other. The case proceeded to trial on the
crossclaims, at the conclusion of which the district court dismissed Weiser's
claims and awarded declaratory relief and attorney fees to Skarpelos.
However, the district court, sua sponte, also awarded restitution to Weiser.
We affirm in part, reverse in part and remand.
The district court properly admitted the accounting statement
The district court's admission of the WAM account statement
over Skarpelos's hearsay objection was not a manifest abuse of discretion
because the court properly determined the statement to be a business record
under NRS 51.135. This court "review[s] a district court's decision to admit
evidence for an abuse of discretion." Daisy Tr. v. Wells Fargo Bank, N.A.,
135 Nev. 230, 232, 445 P.3d 846, 848 (2019). Considerable deference is
given to the district court's evaluation of evidence. Thomas v. Hardwick,
126 Nev. 142, 151, 231 P.3d 1111, 1117 (2010).
NRS 51.135 provides an exception to the hearsay rule for a
‘‘memorandum, report, record or compilation of data . . made at or near the
time [of the acts, events, conditions, opinions or diagnosis] by . . a person
with knowledge, all in the course of a regularly conducted activity, as shown
by the testimony or affidavit of the custodian or other qualified person." The
2013 account statement provided a summary of the amount of cash on
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deposit for Skarpelos's account and a list of the transactions made from
February 1, 2013, to December 31, 2013. The district court found that the
statement was made at or near the time of the event, in the course of
business, based on the testimony of Weiser's principal, Christos Livadas,
that WAM's previous owner provided a printout of the computer records for
all accounts at the time he acquired WAM in 2014. Livadas testified at trial
that account statements are generally created from the brokerage firm's
transaction records. The record demonstrates that the 2013 account
statement is reliable because the document was provided along with those
of other WAM clients to establish the value of WAM upon purchase.
Livadas further testified that WAM's records are audited annually to
ensure the firm's accounts and assets balance, and the audit conducted for
2013 revealed no discrepancies requiring corrective action. See United
States v. Kail, 804 F.2d 441, 448 (8th Cir. 1986) (stating that
Itioundation . . . may also be established by circumstantial evidence, or by
a combination of direct and circumstantial evidence."). Livadas need not
have firsthand knowledge of the events being entered into the database to
qualify as a person with knowledge under NRS 51.135. See Daisy Tr., 135
Nev. at 235-36, 445 P.3d at 850. We conclude that Livadas's testimony
demonstrated that he had a general knowledge of WAM's recordkeeping
system. See, e.g., Thomas v. State, 114 Nev. 1127, 1148, 967 P.2d 1111,
1124 (1998) (A 'qualified person required to authenticate the writing has
been broadly interpreted as anyone who understands the record-keeping
system involved."). The district court did not abuse its discretion in
admitting the 2013 account statement as a business record under NRS
51.135.
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The district court did not err in granting equitable relief to Weiser
The district court did not err in granting equitable relief to
Weiser. See Nev. Const., art. 6, § 6 (noting that the district court has
"original jurisdiction in all cases excluded by law from the original
jurisdiction of justices courts."). Generally, a district court with equitable
"jurisdiction of a controversy on any ground and for any
purpose . . . retain[s] jurisdiction for the purpose of administering complete
relief." Seaborn v. First Judicial Dist. Court, 55 Nev. 206, 222, 29 P.2d 500,
505 (1934). Likewise, NRCP 54(c) requires courts to "grant the relief to
which each party is entitled, even if the party has not demanded such relief
in its pleadings." See also Yount v. Criswell Radovan, LLC, 136 Nev. 409,
420, 469 P.3d 167, 175 (2020) (recognizing that NRCP 54(c) "also supports
affirmance [by] . allow[ing] a district court to award a party the relief to
which they are entitled").
Here, the matter before the district court was an equitable,
interpleader action. We agree with the district court's determination that
restitution was a foreseeable equitable ruling in an action already
predicated on equitable principles. See Landex, Inc. v. State ex rel. List, 94
Nev. 469, 477, 582 P.2d 786, 791 (1978) ("In the absence of [a statutory]
restriction a court of equity rnay exercise the full range of its inherent
powers . . . to accomplish complete justice between the parties, restoring if
necessary the status quo . . . ."). Even though Weiser did not assert a
crossclaim for unjust enrichment against Skarpelos, it did assert unjust
enrichment as an affirmative defense to Skarpelos's crossclaim. See
MacDonald v. Krause, 77 Nev. 312, 318, 362 P.2d 724, 727 (1961) (stating
that a court sitting in equity may "afford complete equitable relief in one
action" for claims of unjust enrichment); see also Grouse Creek Ranches v.
Budget Fin. Corp., 87 Nev. 419, 427, 488 P.2d 917, 923 (1971) (stating that
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when an "issue was raised and tried, the court [is] empowered by NRCP
54(c) to grant the relief granted, if such relief [is] legally warranted."). The
district court found that Weiser proved by a preponderance of the evidence
that Weiser credited Skarpelos's WAM account nearly $250,000 in April
2013, and that the evidence showed that Skarpelos received the benefit of
the money through a series of withdrawals made from the account. See Nev.
Indus. Dev., Inc. v. Benedetti, 103 Nev. 360, 363 n.2, 741. P.2d 802, 804 n.2
(1987) (Unjust enrichment occurs whenever a person has and retains a
benefit which in equity and good conscience belongs to another.").
Accordingly, we conclude that the district court, through its exercise of
proper equitable jurisdiction, granted the relief to which both sides were
entitled, despite discrepancies between pleadings and proof. See Magill v.
Lewis, 74 Nev. 381 , 387-88, 333 P.2d 717, 720 (1958) (recognizing that
NRCP 54(c) requires, "that in a contested case the judgment is to be based
on what has been proved rather than what has been pleaded"); see also
Benedetti, 103 Nev. at 363 n.2, 741 P.2d at 804 n.2 (Money paid through
misapprehension of facts belongs, in equity and good conscience, to the
person who paid it."). Therefore, we affirm the district court's order
awarding restitution to Weiser.
The district court properly awarded ownership of the disputed stock to
Skarpelos
The district court did not err in granting Skarpelos's request for
declaratory relief and awarding ownership of the disputed stock because it
correctly determined that there was no evidence that a valid contract
existed between Skarpelos and either of the Weiser entities and that
Skarpelos was never divested of ownership. "Contract interpretation is
subject to a de novo standard of review. May v. Anderson, 121 Nev. 668,
672, 119 P.3d 1254, 1257 (2005). "However, the question of whether a
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contract exists is one of fact, requiring this court to defer to the district
court's findings unless they are clearly erroneous or not based on
substantial evidence." Id. at 672-73, 119 P.3d at 1257.
We see no reason to overturn the district court's determination
to award the stock to Skarpelos, because the requirements for the transfer
of said ownership were not met. See NRS 78.240 (providing that shares of
stock are "personal property and may be transferred "as provided in
chapter 104 of NRS"); NRS 104.8304(3) (providing that a valid transfer
requires delivery of both the stock certificate and the endorsement "if the
endorsement is on a separate docuniene); NRS 104.8102(1)(g) (defining
[e]ndorsement'" as "a signature that alone or accompanied by other words
is made on a security certificate in registered form or on a separate
document for the purpose of assigning, transferring or redeeming the
security or granting a power to assign, transfer or redeem it."). Weiser
failed to prove an essential term of a contract for the sale of restricted stock
because it did not provide the name of the alleged third-party buyer which,
according to NATCO's counsel's trial testimony, is one of the steps required
to transfer ownership. Weiser's contention that it obtained ownership of
the stock through the April 2013 sale relied on Livadas's testimony that the
credit in Skarpelos's account was provided in exchange for the disputed
stock's ownership. Yet, Livadas conceded at trial that neither WAM nor
Weiser Capital owned the stock at issue in the lawsuit. The district court
found no evidence of a written sale contract for the disputed stock but
determined that there was an oral agreement in April 2013. Because the
district court was in the best position to weigh the contradictory evidence
presented by Weiser, and its assessment is not clearly erroneous, we defer
to the district court's finding that no evidence supported Weiser's ownership
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claim. See Kleernan v. Zigterna, 95 Nev. 285, 287, 593 P.2d 468, 469 (1979)
(stating that a district court's credibility determinations "will not be
disturbed on appear). For these reasons, we affirm the district court's
award of ownership of the disputed stock to Skarpelos.
The district court abused its discretion in awarding attorney fees to
Skarpelos
"The decision to award attorney fees is within the sound
discretion of the district court and will not be overturned absent a manifest
abuse of discretion." Kahn v. Morse & Mowbray, 121 Nev. 464, 479, 117
P.3d 227, 238 (2005) (internal quotation marks omitted). In this case, the
district court abused its discretion in awarding attorney fees to Skarpelos,
because the record does not support that Weiser unreasonably maintained
its claim to ownership of the disputed stock by virtue of the July purchase
and sale agreement. See Chowdhry v. NLVH, Inc., 109 Nev. 478, 487, 851
1.2d, 459, 464 (1993) (reversing award of attorney fees after concluding that
nothing in the record supported the district court's finding of
Ct unreasonableness and motivation to harass.").
NATCO initiated this litigation, not Weiser or Skarpelos. In its
response to Skarpelos's crossclaim, Weiser asserted unjust enrichment as
an affirmative defense. Regardless of whether Weiser changed its legal
theory during trial, the district court found that credible evidence showed
that an agreement to sell the disputed stock existed in April 2013 and that
Weiser deposited approximately $250,000 in reliance on that agreement.
See Capanna v. Orth, 134 Nev. 888, 895, 432 P.3d 726, 734 (2018) ("[A
counter]claim is frivolous or groundless if there is no credible evidence to
support it.") (quoting Rodriguez v. Primadonna Co., 125 Nev. 578, 588, 216
P.3d 793, 800 (2009)). After determining that Skarpelos was never divested
of ownership of the disputed stock, the district court sua sponte awarded
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Weiser restitution of $245,464.64 to prevent Skarpelos from becoming
unjustly enriched and obtaining a windfall. See Frantz v. Johnson, 116 Nev.
455, 472, 999 P.2d 351, 362 (2000) ("A counterclaim cannot be frivolous as
a matter of law when the party asserting the counterclaim actually prevails
on the counterclaim."). The district court granted the relief to which both
sides were entitled, despite discrepancies between pleadings and proof.
Therefore, we reverse the district court's award of attorney fees.
Accordingly, we
ORDER the judgment of the district court AFFIRMED IN
PART AND REVERSED IN PART AND REMAND this matter to the
district court for proceedings consistent with this order.
•
J.
Cadish
J.
, J.
Herndon
cc: Chief Judge, Second Judicial District Court
Second Judicial District Court, Department 10
Lansford W. Levitt, Settlement Judge
Woodburn & Wedge
Holland & Hart LLP/Reno
Washoe District Court Clerk
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