First 100, Llc v. Tgc/Farkas Funding, Llc ( 2022 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
FIRST 100, LLC, A NEVADA LIMITED No. 82794
LIABILITY COMPANY; AND FIRST 100
HOLDINGS, LLC, A NEVADA LIMITED
LIABILITY COMPANY, A/K/A 1ST ONE
HUNDRED HOLDINGS, LLC, A NEVADA
LIMITED LIABILITY COMPANY, FILE
Appellants,
vs. MAR 1 7 2022
TGC/FARKAS FUNDING, LLC,
Res • ondent.
ORDER AFFIRMING IN PART AND DISMISSING IN PART
This is an appeal from a post-judgment order denying a motion
to enforce a settlement agreement and holding appellants and a nonparty
in civil contempt. Eighth Judicial District Court, Clark County; Mark R.
Denton, Judge.'
On January 7, 2021, Matthew Farkas executed a Settlement
Agreement on behalf of respondent wherein respondent agreed to dismiss
the underlying litigation against appellants. Following an evidentiary
hearing, the district court entered an order finding that the Settlement
Agreement was not a valid contract because Farkas lacked actual or
'Pursuant to NRAP 34(f)(1), we have determined that oral argument
is not warranted in this appeal.
apparent authority to bind respondent.2 The district court's order also held
appellants and nonparty Jay Bloom in civil contempt for their failure to
comply with a previous order requiring them to produce appellants books
and records. As a sanction for the contempt, the district court indicated
that it would award respondent a to-be-determined amount of attorney fees
and costs.
On appeal, appellants contend (1) the district court erred in
finding that Farkas lacked apparent authority to bind respondent to the
Settlement Agreement, and (2) the district court erred in holding nonparty
Bloom personally liable for the fees and costs.
With respect to appellants' first argument, appellants contend
that the district court overlooked an August 2020 declaration from
respondent's manager, Adam Flatto, wherein he stated that Farkas was
and continued to be respondent's "Administrative Member." However,
Flatto's declaration also stated that "[u]nder Section 3.4 of [respondent's]
Operating Agreement, the Administrative Member can only take action to
bind [respondent] after consultation with, and consent of, all [respondent's]
members," i.e., Flatto. Thus, Flatto's declaration is consistent with the
district court's finding that Farkas lacked authority to bind respondent
without Flatto's consent and provides no support for appellants' argument.
To the extent that appellants argue that they (via Bloom) thought Farkas
2 The district court also appears to have found that the Settlement
Agreement was invalid due to a lack of consideration or, alternatively,
because it was not negotiated in good faith. In light of our resolution of this
appeal, we need not address the parties' arguments regarding these
findings.
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had obtained Flatto's consent to execute the Settlement Agreement despite
that consent having not been communicated to them, substantial evidence
supports the district court's finding that such a belief would have been
objectively unreasonable. See Mack v. Estate of Mack, 125 Nev. 80, 95, 206
P.3d 98, 108 (2009) ("[T]he question of whether a 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." (internal
quotation marks omitted)); Great Am. Ins. Co. v. Gen. Builders, Inc., 113
Nev. 346, 352, 934 P.2d 257, 261 (1997) CA party claiming apparent
authority of an agent as a basis for contract formation must prove (1) that
he subjectively believed that the agent had authority to act for the principal
and (2) that his subjective belief in the agent's authority was objectively
reasonable.").' In particular, the district court's order identified multiple
previous instances wherein Flatto had communicated to Bloom that Farkas
could not bind respondent without Flatto's consent, with the most notable
instance being a 2020 arbitration award wherein the panel invalidated a
different agreement between respondent and appellant that Farkas had
purported to execute on behalf of respondent.3 Accordingly, we conclude
3In this respect, the only evidence appellants identify to support their
position that Farkas represented to Bloom that he had obtained Flatto's
consent to execute the Settlement Agreement is a fleeting comment made
by Bloom at the evidentiary hearing. However, Farkas testified at the
evidentiary hearing that he did not make any such representations to
Bloom and that he had "made it clear to [Bloom] over the years that he
needs to speak to [Flatto] and the lawyere because Farkas "was not in a
position to make any decisions on behalf of [respondent]." To the extent
that the district court's findings weighed the credibility of this competing
testimony, we decline to reweigh those findings. Ellis v. Carucci, 123 Nev.
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(0) 1947A aggibe>
that substantial evidence supports the district court's finding that Farkas
lacked apparent authority and, consequently, that the Settlement
Agreement was invalid and unenforceable.
With respect to appellants second argument, respondent
contends that this court lacks jurisdiction because Bloom, who is the only
person aggrieved by the district court holding him personally liable, was not
a party to the underlying proceedings and did not file a writ petition
challenging the district court's order. Cf. Mona v. Eighth Judicial Dist.
Court, 132 Nev. 719, 724-25, 380 P.3d 836, 840 (2016) ([W]here the
sanctioned party was not a party to the litigation below, he or she has no
standing to appeal."); Detwiler v. Eighth Judicial Dist. Court, 137 Nev., Adv.
Op. 18, 486 P.3d 710, 715 (2021) (Where no rule or statute provides for an
appeal of a contempt order, the order may properly be reviewed by writ
petition."). Appellants do not meaningfully refute respondent's contention
but instead argue that they are challenging the district court's order insofar
as it held them liable for the fees and costs. We decline to consider this
argument because appellants' opening brief did not allude to any such
argument. See Francis v. Wynn Las Vegas, LLC, 127 Nev. 657, 671 n.7, 262
P.3d 705, 715 n.7 (2011) (observing that this court generally declines to
consider arguments raised for the first time in a reply brief). Accordingly,
we agree with respondent that we lack jurisdiction in the context of this
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.").
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appeal to consider whether the district court appropriately held nonparty
Bloom personally liable for the fees and costs.
In light of the foregoing, we affirm the district court's
challenged order insofar as it found the January 7, 2021, Settlement
Agreement to be unenforceable. We also dismiss this appeal insofar as it
challenges the district court's decision to hold nonparty Bloom personally
liable for fees and costs as a civil contempt sanction.
It is so ORDERED.4
Ale4 , J. , Sr. J.
Stiglich
CC: Hon. Mark R. Denton, District Judge
Persi J. Mishel, Settlement Judge
Maier Gutierrez & Associates
Garman Turner Gordon
Eighth District Court Clerk
4The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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