Bloom v. Dist. Ct. (Tgc/Farkas Funding, Llc) ( 2022 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
JAY BLOOM, AN INDIVIDUAL, No. 84704
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT
COURT OF THE STATE OF NEVADA,
FILF13-
IN AND FOR THE COUNTY OF OCT ll 2022
CLARK; AND THE HONORABLE LILLZASE A. SF.OWN
PiREW COURT
MARK R. DENTON, DISTRICT JUDGE, CLER F
Respondents, CLERK
and
TGC/FARKAS FUNDING, LLC,
Real party in Interest.
ORDER DENYING PETITION
This original petition for a writ of mandamus challenges district
court orders finding petitioner in contempt and awarding attorney fees as a
sanction.
Petitioner Jay Bloom is the manager of First 100, LLC. In
November 2020, the district court entered an order confirming an
arbitration award and directing First 100 to provide certain business
records to real party in interest TCC/Farkas Funding, LLC (TGC)
consistent with the arbitration award. When First 100 failed to do so, the
district court entered an order in April 2021 holding both First 100 and
"Although petitioner has alternatively requested a writ of prohibition,
he has not explained how such relief would be proper. See Las Vegas Sands
Corp. u. Eighth Judicial Dist. Court, 130 Nev. 643, 649, 331 P.3d 905, 909
(2014) (recognizing that a writ of prohibition is appropriate when a district
court exceeds its jurisdiction).
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Bloom in contempt for failing to comply with the November 2020 order.2 As
its bases for holding Bloom in contempt, the district court found that Bloom
was both (1) First 100's alter ego and (2) First 100's "responsible party."
Thereafter, the district court entered an order in June 2021 holding First
100 and Bloom jointly and severally liable for TGC's attorney fees as a
sanction for their contempt.
In his writ petition, Bloom challenges the district court's April
2021 contempt order and its June 2021 sanctions order. In particular, he
contends that neither of the district court's two alternative bases for finding
him in contempt (and thereafter sanctioning him) was proper.
We need not address the district court's alter ego finding
because we conclude that its "responsible party" finding was neither an
arbitrary nor capricious exercise of discretion. Cf. Int'l Game Tech., Inc. v.
Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) ("A
writ of mandamus is available to compel the performance of an act that the
law requires as a duty resulting from an office, trust, or station or to control
an arbitrary or capricious exercise of discretion."); see also Detwiler v.
Eighth Judicial Dist. Court, 137 Nev. 202, 206, 486 P.3d 710, 715 (2021)
("Whether a person is guilty of contempt is generally within the particular
knowledge of the district court, and the district court's order should not
lightly be overturned. . . . Accordingly, this court normally reviews an order
of contempt for abuse of discretion." (internal quotation marks, citations,
2The district court did so after holding a two-day evidentiary hearing
at which Bloom testified.
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and alterations omitted)). As recognized by the district court in its April
2021 contempt order:
The "responsible party" rule is longstanding,
providing that the contempt powers of the Courts
reach through the corporate veil to command not
only the entity, but those who are officially
responsible for the conduct of its affairs. If a person
is apprised of the Order directed to the entity,
prevents compliance or fails to take appropriate
action within their power for the performance of the
corporate duty, they are guilty of disobedience and
may be punished for contempt.
See, e.g., Wilson v. United States, 221 U.S. 361, 376 (1911) (recognizing the
concept of the responsible-party rule); Elec. Workers Pension Tr. Fund of
Local Union #58 IBEW Gary's Elec. Serv. Co., 340 F.3d 373, 382 (6th Cir.
2003) (same); United States v. Laurins, 857 F.2d 529, 535 (9th Cir. 1988)
(same); Luu N' Care, Ltd. v. Laurian, 2019 WL 4279028, at *4 (D. Nev. Sept.
10, 2019) (same).
Bloom contends that the district court's responsible-party
finding was erroneous either because (1) cases applying the responsible-
party rule are nonbinding or (2) he was not actually First 100's "responsible
party." We reject Bloom's first argument because although this court has
not yet formally adopted the responsible-party rule, we find the cases
applying that rule to be persuasive, and Bloom has not explained why
refusing to recognize the rule would be good policy.3 Bloom's second
3Nor does Bloom's reliance on NRS 86.371 change our decision. That
statute simply provides that an LLC's manager "is [not] individually liable
for the debts or liabilities of the company" unless the articles of organization
provide for such liability. Here, the district court did not hold Bloom liable
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argument is premised on the assertion that the at-issue business records
were in the possession of First 100's former controller and, despite Bloom
being the sole manager of First 100, he could not compel the former
controller to produce the records. We are not persuaded that the district
court clearly erred in rejecting this argunient, given that Bloom's own
testimony at the evidentiary hearing demonstrates that the former
controller would have produced the documents if he were paid for his time.4
Although Bloom alluded in his testimony to First 100 not having the
financial resources to do so, the district court was within its discretion to
either disregard this testimony or find that it did not change Bloom's status
as First 100's responsible party.5 Cf. Ellis v. Carucci, 123 Nev. 145, 152,
161 P.3d 239, 244 (2007) ("[W]e leave witness credibility determinations to
the district court and will not reweigh credibility on appeal.").
for any debt or liability of First 100. Rather, it held him in contempt for
violating a court order and sanctioned him accordingly.
4Bloom contends that First 100's Operating Agreement requires a
person requesting books and records to pay for them and "that no court
order says [TGC] is absolved from having to pay for the production of the
books and records." This contention is belied by the district court's
November 2020 order, which in no uncertain terms "absolved" TGC of that
responsibility.
5 Notably, First 100 was able to post a roughly $150,000 supersedeas
bond to cover the sanction award. Both parties agree that after the previous
related appeals were resolved in Docket Nos. 82794 and 83177, this bond
was released and only $1,606.85 of the sanction award remained unsatisfied
(representing accrued interest). TGC contends that, in light of the bond's
release, this writ petition is moot. While this argument is well-taken, we
nevertheless entertain this petition because Bloom continues to challenge
his liability for the remaining $1,606.85.
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In sum, we are not persuaded that the district court abused its
discretion in holding Bloom in contempt under a responsible-party theory
and in subsequently holding him liable for the contempt sanctions. We
therefore
ORDER the petition DENIED.6
arraguirre
, Sr.J.
Herndon
cc: Mark R. Denton, District Judge
Maier Gutierrez & Associates
Garman Turner Gordon
Eighth District Court Clerk
6The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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