Genx Processors Mauritius Ltd. v. Jackson

GENX PROCESSORS MAURITIUS LIMITED, Plaintiff, v. MATTHEW G. JACKSON a/k/a MATT G. JACKSON, et al., Defendants.

Case No. 2:14-cv-01938-APG-PAL

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

November 2, 2018

ORDER

(Mot. to Compel - ECF No. 58; Mot. Exceed Page Limits - ECF No. 60)

This matter is before the court on Plaintiff Genx Processors Mauritius Limited's Motion to Compel Responses to Subpoenas and Attorney Fees (ECF No. 58) and Motion to Exceed Page Limits (ECF No. 60). These Motions are referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(A) and LR IB 1-3 of the Local Rules of Practice. The court has considered the Motions, Opposition (ECF No. 59) filed by Nonparties Vinum, Inc.; Caymus Limited Partnership; Ecommerce Marketing, Inc.; T-3 Media, LLC; Wild West Media, LLC; Pacific Coastal, LLC; and Consumercoupons.com, Inc.; and Reply (ECF No. 61). For the reasons explained, the Motions are granted, but the request for attorney's fees and costs is denied.

BACKGROUND

I. THE PLEADINGS AND DEFAULT JUDGMENT

Plaintiff commenced this action on November 21, 2014, by filing a Complaint (ECF No. 1) against defendants Symmetric Systems, LLC ("Symmetric, LLC"), and Matthew G. Jackson a/k/a Matt G. Jackson ("Jackson"). The complaint stated five claims: (1) breach of contract against Symmetric, LLC, (2) conversion against all defendants, (3) deceptive trade practices against Symmetric, LLC, (4) fraud against all defendants, and (5) alter ego against Mr. Jackson.

The defendants failed to answer or otherwise respond to the complaint. Plaintiff therefore sought entry of default against Symmetric, LLC and Mr. Jackson. ECF Nos. 6, 8. The Clerk of Court entered default against them. Clerk's Default (ECF Nos. 7, 9). In April 2015, Plaintiff filed a Motion for Default Judgment (ECF No. 10). District Judge Andrew P. Gordon granted default judgment against both Symmetric, LLC and Mr. Jackson in the amount of $555,576.19. Sept. 18, 2015 Order (ECF No. 11).

Twelve days after entry of default judgment, Symmetric, LLC, converted from a Nevada limited liability company to a Nevada corporation. Plaintiff therefore filed a Motion for Relief from Default Judgment (ECF No. 12) asking Judge Gordon to enter a new judgment to include Symmetric Systems, Inc. ("Symmetric, Inc.") as the successor by conversion of Symmetric, LLC. Id.; see also Jan. 4, 2016 Mins. of Proceedings (ECF No. 16). Plaintiff subsequently filed a Motion to Amend Complaint (ECF No. 19) seeking to add Symmetric, Inc. as a defendant given the direct relationship of the two entities. Judge Gordon granted Plaintiff's motion to amend and denied as moot the motion for relief from default judgment. April 22, 2016 Order (ECF No. 26). The First Amended Complaint (ECF No. 28) added Symmetric, Inc. as a defendant and expanded Plaintiff's claims for relief as follows: (1) breach of contract against Symmetric, LLC, (2) conversion against all defendants, (3) deceptive trade practices against Symmetric, LLC, (4) fraud against all defendants, (5) alter ego against Mr. Jackson, (6) alter ego against Symmetric, Inc., and (7) corporate successor liability against Symmetric, Inc.

Symmetric, Inc. failed to answer or otherwise respond. Thus, Plaintiff sought and received Clerk's Entry of Default (ECF No. 33). Judge Gordon subsequently granted default judgment against Symmetric, Inc. in the amount of $555,576.19. Apr. 12, 2017 Order (ECF No. 35).

II. POST-JUDGMENT PROCEEDINGS

Plaintiff filed the first Motion for Charging Order (ECF No. 21) in February 2016, requesting that Mr. Jackson's ownership interests in several corporations and limited liability companies be charged since he was identified in public records as an officer or manager. A second Motion for Charging Order (ECF No. 52) was filed two years later in February 2018. The court granted the motions and charged nine entities with satisfying the judgment against Jackson: (1) Symmetric Systems, Inc.; (2) Ecommerce Marketing, Inc.; (3) Vinum, Inc.; (4) SymmetricSystems, LLC; (5) T-3 Media, LLC; (6) Wild West Media, LLC; (7) Pacific Coastal, LLC; (8) Consumercoupons.com, Inc; and (9) Caymus Limited Partnership. Apr. 22, 2016 Order (ECF No. 27); Mar. 12, 2018 Order (ECF No. 53).

Plaintiff filed a Bill of Costs (ECF No. 36) and Motion for Interests and Costs (ECF No. 37) in April 2017. The Clerk of Court taxed costs in the amount of $846.78. ECF No. 38. Judge Gordon awarded pre-judgment interest of $72,250.36. Order (ECF No. 46). Additionally, post-judgment interest was awarded from April 12, 2017, until paid in full, and the Clerk was instructed to enter an amended judgment to include the original judgment amount of $555,576.19, plus pre-judgment interest and costs previously taxed. Id.; Oct. 17, 2017 Am. Judgment (ECF No. 47).

III. STATE COURT LITIGATION

On April 4, 2017, Plaintiff filed suit in the Eighth Judicial District Court of the State of Nevada against seven entities named in the charging orders with ties to Jackson: (1) Ecommerce Marketing, Inc.; (2) Vinum, Inc.; (3) T-3 Media, LLC; (4) Wild West Media, LLC; (5) Pacific Coastal, LLC; (6) Consumercoupons.com; and (7) Caymus Limited Partnership. Opp'n Ex. B, Compl. (ECF No. 59-2), GenX Processors Mauritius Ltd. v. Ecommerce Marketing, Inc., A-17-753472-C (the "state litigation"). The complaint alleged the case arises from the judgment Plaintiff acquired in this court in September 2015 and the related charging order entered in April 2016. Plaintiff alleged that Jackson "has used, and continues to use the Companies to shield his personal assets from execution to satisfy Plaintiff's judgment against him personally." Id. at 3, ¶ 15; see also Mot. (ECF No. 58) at 8 n.3. Plaintiff alleged one claim of alter ego against all defendants.

In November 2017, Plaintiff filed an amended complaint in the state litigation. Opp'n Ex. C, Am. Compl. (ECF No. 59-3). The amended pleading omits Ecommerce Marketing, Inc. as a defendant and adds a claim against Vinum, Inc. and Caymus Limited Partnership for "Alter Ego, Reverse Peirce." Id. at 5, ¶¶ 29-45.

The state litigation is currently ongoing.¹ In July 2018, the state court held a discoveryconference. According to the state court's minutes, the commissioner recommended a discovery cutoff of April 18, 2019, and deadlines of January 18, 2019, for adding parties and amended pleadings, and May 20, 2019, for dispositive motions. A scheduling order was subsequently entered. A bench trial is currently set for July 1, 2019.

In addition, Plaintiff filed an Application of Foreign Judgments in the state court in February 2018. Opp'n Ex. E (ECF No. 59-5), GenX Processors Mauritius Ltd. v. Matthew G. Jackson, A-18-769310-F. Plaintiff registered the original default judgment and amended judgment, and this state case is now closed.

IV. THE PARTIES' POSITIONS

Plaintiff seeks discovery in aid of its judgment against Defendants / Judgment Debtors Jackson and Symmetric, Inc., f/k/a Symmetric, LLC. The Motion to Compel (ECF No. 58) requests an order compelling Vinum, Inc.; Caymus Limited Partnership; Ecommerce Marketing, Inc.; T-3 Media, LLC; Wild West Media, LLC; Pacific Coastal, LLC; and Consumercoupons.com, Inc. (collectively, the "Charged Entities"²) to respond to subpoenas duces tecum served in accordance with NRS 50.165 and Rules 30 and 45 of the Federal Rules of Civil Procedure.³ See Mot. Exs. 1-7 (ECF Nos. 58-1 - 58-7), Subpoenas.

The motion asserts that on April 20, 2017, Plaintiff served a subpoena on the registered agent for each of the Charged Entities. The subpoenas were virtually identical and requested the following from each of the Charged Entities:

1. Copies of federal income tax returns for "ENTITY", for the years 2013, through the latest return you have filed, including all schedules and exhibits. Include all United States gift tax returns filed by "ENTITY", since 2013 to the present.

2. All financial statements prepared for and/or on behalf of "ENTITY", from January 1, 2013, through the present date.

3. Copies of any and all bank statements for accounts in the name of "ENTITY" from January 1, 2013, to the present.

4. Front and back copies of any checks, drafts, or money orders issued by "ENTITY", from January 1, 2013, to the present, payable to Mr. Matthew G. Jackson.

5. Any documents evidencing withdrawals by Mr. Matthew G. Jackson or evidence of membership distributions made by you to Mr. Matthew G. Jackson.

6. Please furnish all certificates of formation, articles of incorporation or organization, partnership agreements (general or limited), or joint venture agreements by "ENTITY", including all amendments thereto.

7. Please furnish the following Documents Relating to "ENTITY", from January 1, 2013, to the present:

(a) minutes of organizational meeting of members or shareholders

(b) minutes of meetings of the board of directors, if any

(c) the annual minutes of meetings

(d) all company or corporate resolutions

(e) copies of share certificates or member certificates

8. Any and all Deeds to property held my "ENTITY".

9. Any and all vehicle titles held by "ENTITY".

10. Any and all Leases from property held by "ENTITY".

On May 4, 2017, counsel for the Charged Entities served objection letters referencing the subpoenas. Mot. Exs. 8A-8G (ECF Nos. 58-8 - 58-14). The objection letters were substantially similar and claimed that Plaintiff's exclusive remedy was limited to a charging order against Jackson's interests in the Charged Entities and, as such, the subpoenas were impermissible. The letters further claimed that the requested discovery was irrelevant.

Approximately one year later, on May 15, 2018, counsel for the parties conducted a meet and confer conference. Mot. at 3, ¶¶ 8-9. The motion claims that counsel for the Charged Entities agreed to speak with Jackson and determine whether he would be willing to produce anything. Id. ¶ 15.⁴ On May 25, 2018, counsel indicated the Charged Entities would not be producing documents for the reasons stated in the...