Fred Holabird v. Donald Kagin ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 6 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FRED HOLABIRD, No. 19-15982
Plaintiff-Appellee, D.C. No.
3:14-cv-00262-HDM-CBC
v.
DONALD KAGIN; et al., MEMORANDUM*
Defendants-Appellants.
Appeal from the United States District Court
for the District of Nevada
Howard D. McKibben, District Judge, Presiding
Submitted August 11, 2020**
San Francisco, California
Before: HAWKINS and CHRISTEN, Circuit Judges, and BATAILLON, ***
District Judge.
Donald Kagin (hereinafter “Kagin”) appeals from the district court’s order
affirming the recommendation of the magistrate judge that Kagin breached the
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Joseph F. Bataillon, United States District Judge for
the District of Nebraska, sitting by designation.
Settlement Agreement of the parties which resulted in an award of damages in the
amount of $499,210.10 and attorneys’ fees in the amount of $101,005.00.
Fred Holabird (hereinafter “Holabird”) previously owned Holabird Western
Americana Collections, LLC, a Nevada limited liability company (hereinafter
“HWAC”). HWAC purchased, sold and auctioned numismatics and other types of
collectibles known as Americana. Holabird is recognized as a leading authority in
the field. In September of 2006, Kagin approached Holabird with a business
opportunity, wherein the parties would purchase and combine efforts for the sale of
rare coins, tokens and similar items. They formed Holabird Kagin Americana, Inc.
(hereinafter “HKA”). Holabird became an employee and ran the business out of the
former HWAC office in Reno, Nevada. Approximately eight years later, Kagin
terminated Holabird. Kagin took the inventory, and HKA went out of business.
Holabird filed suit against Kagin in May 2014.1 After several years of litigation, the
case settled. The settlement was placed on the record and a written Settlement
Agreement was executed on February 3, 2017. Within the year, Kagin breached the
agreement.
1
Somewhere during this time period, it is alleged that Kagin overvalued material
sent to HWAC and supplied material that was owned by a Dr. Gavin Awerbuch,
Kagin, and Kagin’s father, with the intent to try and deceive Holabird as to the
amount and value of the material being supplied. Dr. Awerbuch is a convicted felon.
Dr. Awerbuch collected rare coins and the government was confiscating them when
possible due to his alleged Medicare fraud and large amounts of opioid prescriptions.
Kagin had sold Dr. Awerbuch over $7,000,000.00 in rare coins.
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We “review de novo the district court’s interpretation of state contract law.”
Los Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017) (citing
AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 949 (9th Cir. 2006)).
The construction and enforcement of settlement agreements are governed by the law
of the forum state. United Commercial Ins. Serv. Inc. v. Paymaster Corp., 962 F.2d
853, 856 (9th Cir. 1992) (citation omitted). The Settlement Agreement in this case
provides that it “shall be governed by and construed in accordance with the laws of
the State of Nevada.” Under Nevada law, “[a] settlement agreement is a contract
governed by general principles of contract law.” Power Co. v. Henry, 321 P.3d 858,
863 (2014) (citation omitted).
1. Kagin contends the district court inappropriately awarded lost profits
and that the magistrate judge should have used the average-fee formula. At an
evidentiary hearing before the magistrate judge, Holabird’s expert Brook Maylath
offered three possible scenarios for choosing the amount of lost profits. Kagin did
not offer up an expert regarding Holabird’s damages. The magistrate judge
determined that the expert’s methodology was sound and not speculative. The
magistrate judge chose the lowest calculation offered by Holabird’s expert.
It is clear that Holabird was entitled to damages from lost profits as a result of
the breach. As to the measure or extent of damages, the Ninth Circuit has stated:
“Once the fact of loss is thus proven, courts will not quibble over the numbers
3 19-15982
involved, but will use a lenient approach to measurement of those damages.” Kissell
Co. v. Gressley, 591 F.2d 47, 50 (9th Cir. 1979); see also Gen. Elec. Supply Co. v.
Mt. Wheeler Power, Inc., 587 P.2d 1312, 1313 (1976) (quoting Fireman’s Fund Ins.
v. Shawcross, 442 P.2d 907, 912 (1968)) (“The rule barring recovery of uncertain
lost profits is directed against ‘uncertainty as to the existence of [profits] rather than
as to measure or extent.’”).
Further, Kagin made no argument regarding the testimony of Holabird’s
expert in this regard, and likewise he did not mention his proposed consignment rate
in his Proposed Findings of Facts and Conclusions of Law. The failure to object to
expert testimony at trial generally results in a waiver of the objection on appeal. See
Wilson v. Lopez, 682 Fed. App’x. 579, 580 (9th Cir. 2017). Again, it is clear from
the evidence presented that Kagin breached the Settlement Agreement. Further, the
magistrate judge and district court made a reasonable calculation for determining the
amount of lost profits. Accordingly, we affirm the district court’s damages award.
2. Kagin argues that Holabird is not entitled to attorneys’ fees under the
Settlement Agreement. The indemnity provision limits the right to attorneys’ fees
to those “resulting from or arising out of any breach of any of the representations or
warranties made by them in this Agreement.” Kagin argues that the word
“representation” is intended to limit the right to attorneys’ fees. Holabird, however,
disagrees, arguing that “representations” refers to any breach of any and all
4 19-15982
representations in the Settlement Agreement. The district court correctly determined
that Holabird was entitled to attorney’s fees, given all the breaches committed by
Kagin, and that the word “representation” would not be construed so narrowly under
the Settlement Agreement.
In addition, this Court will remand to the district court for a determination of
the fees incurred on this appeal. See e.g., ([t]he Nevada Supreme Court has
acknowledged that attorney fees award made pursuant to contract includes fees
incurred on appeal. In re Estate & Living Trust of Miller, 216 P.3d 239, 243 (Nev.
2009); Mann v. Morgan Stanley Smith Barney, LLC, 215CV00217GMNPAL, 2016
WL 1254242, at *2 (D. Nev. Mar. 28, 2016) (“the fees McGregor incurred on appeal
were necessary to obtaining her policy benefits, the logic of Brandt necessarily
implies that they should be recoverable.”) McGregor v. Paul Revere Life Ins. Co.,
369 F.3d 1099, 1101 (9th Cir. 2004); Gamble v. Northstore Partnership, 28 P.3d
286, 290 (Ala. S.Ct. 2001) (“The general rule in other jurisdictions is that contractual
provisions providing for the allowance of attorney’s fees to the winning party are
construed to include fees incurred both at the trial level and on appeal.”).
We AFFIRM the district court’s award of damages in the amount of
$499,210.10 and attorneys’ fees in the amount of $101,005.00. We REMAND the
case to the district court for a determination of fees payable to Holabird on appeal.
5 19-15982