BLIGE v. TERRY ( 2023 )

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139 Nev., Advance Opinion (00
IN THE SUPREME COURT OF THE STATE OF NEVADA
AVA WHITNEY BLIGE, AN No. 85214
INDIVIDUAL,
Appellant, . = ! fo = By
Vs.
CHRISTOPHER TERRY, AN
INDIVIDUAL,
Respondent.
Appeal from a district court amended default judgment in a tort
action. Eighth Judicial District Court, Clark County; Susan Johnson,
Judge.
Affirmed.
Ava Whitney Blige,
Pro Se.
Holland & Hart LLP and Lars K. Evensen, James M. DeVoy, and Jenapher
Lin, Las Vegas,
for Respondent.
BEFORE THE SUPREME COURT, EN BANC.
OPINION
By the Court, STIGLICH, C.J.:
Respondent Christopher Terry sued appellant Ava Blige for
damages, asserting various contract-based and tort-based claims centered
on allegations that Blige extorted cryptocurrency and money for cars from
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him under threat of publishing his personal information. As a result of
discovery abuses, the district court struck Blige’s answer to the complaint
and entered a default. At a prove-up hearing, the court concluded that
Terry had met his burden to establish a prima facie case on his claims of
conversion, unjust enrichment, and intentional infliction of emotional
distress, for which he was entitled to proven damages. The court also found
that the factual allegations, deemed admitted, supported a claim for
extortion, despite extortion not being pleaded as a specific claim in the
complaint. It then entered a default judgment awarding damages to
account for the emotional] distress, moneys spent on cars for Blige, and
cryptocurrency transferred to Blige; the judgment was later amended to
account for the cryptocurrency’s value.
On appeal, Blige argues that the district court erroneously
determined that she impliedly consented to being sued under the unpleaded
legal theory of extortion. We agree with Blige on this issue and hold that,
in default proceedings, a defaulting party cannot be found to have impliedly
consented to try claims that were not pleaded in the complaint. Although
Blige also challenges the judgment on the conversion, unjust enrichment,
and emotional distress claims, we conclude that the district court properly
determined that Blige wrongfully dispossessed Terry of the eryptocurrency
and money for cars by way of extortive acts under these theories and caused
him emotional distress. Accordingly, we affirm the judgment.
FACTS AND PROCEDURAL HISTORY
According to the complaint, Terry is the chief executive officer
of an Internet company. Blige worked at that company, first as Terry’s
personal assistant and later as an independent contractor. Their
professional association led to a romantic relationship. While they were
romantically involved, Terry gave Blige several luxury items, including
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cars, cash, and cryptocurrencies. Once the relationship ended, Blige
revealed to Terry that she had taken damaging or compromising
photographs of him and had made audio and video recordings of his
conversations and phone calls. She threatened to publicly release the
photographs and recordings unless he complied with her demands for
valuables, including cryptocurrency. Terry comphed with Blige’s demand
to transfer Bitcoin to her in hopes that she would not release any of the
photographs or recordings. However, after he complied, Blige continued to
threaten to publicly release the information unless he met additional
demands. To protect himself, Terry transferred more Bitcoin to Blige.
Terry eventually made a report of extortion against Blige to the police.
In the underlying civil complaint, Terry sought relief against
Blige, alleging, as relevant here, claims for breach of contract, breach of the
covenant of good faith and fair dealing, conversion, unjust enrichment, and
intentional infliction of emotional distress. Terry also sought declaratory
and injunctive relief to prevent Blige from releasing the photographs and
recordings. Blige filed an answer, but during discovery, she failed to
produce electronically stored information, including the photographs and
recordings, and she responded to only one set of discovery requests. As the
discovery deadline approached, Blige fired her attorneys, who then filed a
motion to withdraw, which the district court granted. The district court
ordered Blige, who was proceeding pro se at the time, to respond to all
discovery requests by a specified date. Blige failed to respond to the district
court's order. Terry then moved for a default as an NRCP 37 sanction for
failure to comply with discovery obligations. Blige failed to appear at the
October 12, 2021, hearing on the motion, and the district court struck
Blige’s answer and entered a default, finding that Blige willfully and
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repeatedly failed to respond to discovery requests and failed to turn over
electronically stored information in violation of court orders.
Blige moved to set aside the default, asserting that she was
unaware of the court date. She also filed a supplement to her motion with
a supporting declaration in which she asserted that (1) she was unaware of
the outstanding discovery requests due to her former counsel’s withdrawal;
(2) she “did not personally receive any new mail related to any outstanding
discovery obligations”; (3) Terry served her with motions and papers by
mailing those documents to her parents’ house, where she did not live full
time: (4) she could not find anything after police had “trashed” the house
when executing a warrant; and (5) she was arrested on October 18, 2021,
and in jail until around October 23, 2021. The district court denied the
motion to set aside the default, noting that the address Blige provided in
the motion was identical to the address at which she was served by mail
with the order directing her to respond to the discovery requests.
Terry moved for a default judgment, requesting compensatory
and punitive damages. At this point, both parties were represented by
counsel and appeared at the prove-up hearing, and both Blige and Terry
testified. To support his damages, Terry presented screenshots of Bitcoin
transfers to Blige and to his car dealer, as well as copies of text messages
between him and “Ava,” “AvaLavaa,” and “Ava 2.” Blige objected to the
admission of this evidence, but the district court overruled her objection.
The district court granted Terry’s motion for a default judgment
as to his claims for conversion, unjust enrichment, and intentional infliction
of emotional distress, finding that Terry had made a prima facie showing of
liability under these theories and had proven resultant damages. Moreover,
relying on NRCP 15(b)(2), the district court amended the pleadings to
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conform to the evidence and found Blige liable for damages resulting from
the tort of extortion, even though that tort was not included as a specified
claim in the complaint. The court denied Terry’s motion as to all other
causes of action asserted and instructed Terry to prove the value of the
transferred Bitcoin. Terry subsequently submitted his counsel's affidavit
in support of the judgment calculation, which relied on the Wall Street
Journal Pro Central Banking. Over Blige’s objection, the district court
accepted Terry's valuation and amended its judgment accordingly. In total,
the court awarded Terry $2,631,708.86 in compensatory damages and,
finding Blige’s conduct malicious, oppressive, and in conscious disregard for
the consequences, awarded $2,201,358.44 in punitive damages. Bhge
appeals.
DISCUSSION
Blige contends that the district court abused its discretion by
denying her motion to set aside the entry of default. Blige also asserts that
the district court (1) improperly found that Blige imphedly consented under
NRCP 15(b)(2) to trying a claim for the tort of extortion; (2) admitted and
considered unauthenticated evidence of damages; and (3) erred in
concluding that Terry made prima facie showings that supported lability
and resulting damages for conversion, unjust enrichment, and intentional
infliction of emotional distress. We address each of Blige’s contentions in
turn.
The district court properly denied Blige’s motion to set aside the default
Blige argues that the district court abused its discretion by
finding no good cause to set aside the default. Specifically, she contends
that she demonstrated that her failure to respond to discovery requests
resulted from her being unaware of any such requests or of pending
hearings, in part because she was arrested on October 18 and detained for
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five days, and in part because she did not otherwise personally receive
mailed orders and notices notifying her of obligations in the case. Blige also
argues that she could not have complied with directives to provide the
electronically stored photographs and recordings because her electronic
devices were seized by the police.
We review the district court's decision regarding whether to set
aside a default for an abuse of discretion. Sealed Unit Parts Co. v. Alpha
Gamma Chapter of Gamma Phi Beta Sorority Inc. of Reno, 99 Nev. 641, 643,
668 P.2d 288, 289 (1983), overruled on other grounds by Epstein v. Epstein,
113 Nev. 1401, 1405, 950 P.2d 771, 773 (1997). NRCP 55(c) provides that a
district court may set aside a default for “good cause.” In asking to set aside
a default for good cause, “the moving party must show some excuse for its
failure to answer or otherwise defend.” Sealed Unit Parts, 99 Nev. at 648,
668 P.2d at 289. The “good cause” standard includes NRCP 60(b)(1) grounds
for relief, including “mistake, inadvertence, surprise or excusable neglect.”
See Intermountain Lumber & Builders Supply, Inc. v. Glens Falls Ins. Co.,
83 Nev. 126, 129, 424 P.2d 884, 886 (1967).
The record on appeal undermines Blige’s claim that she was
unaware of the outstanding discovery requests and the hearing date. Blige
stated in her declaration in support of the motion to set aside that she
reviewed the outstanding requests and provided responses and
documentation for the requests to her former attorneys on July 28, 2021.
Although she claimed that she believed her former attorneys had turned
over those responses to Terry, her former attorneys’ sworn declaration in
support of their motion to withdraw as counsel confirms that Blige fired her
former attorneys on that same day, July 28, 2021, and the attorney-client
relationship was irretrievably broken to the extent that counsel had to have
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Blige escorted out of the law offices by police. Thus, the record contradicts
Blige’s representations that she reasonably believed the requests were no
longer outstanding because former counsel responded to them on her behalf.
Further, the address where Blige was served the order directing
her to respond to discovery and the NRCP 37 motion, in which Terry sought
an order striking Blige’s answer to the complaint and a default, was the
same address that Blige used in her motion to set aside. See Durango Fire
Prot., Inc. v. Troncoso, 120 Nev. 658, 663, 98 P.3d 691, 694 (2004) (declining
to set aside a judgment on excusable neglect grounds after rejecting a
party’s claimed lack of knowledge of a scheduled hearing when notice of the
hearing was mailed to the party's address of record). Moreover, a copy of
the NRCP 37 motion was served on Blige by email, and Blige did not refute
that opposing counsel had the correct email addresses.
Similarly, the district court was within its discretion to find
that Blige’s arrest on October 18 does not constitute good cause for why she
did not attend the October 12 hearing on the NRCP 37 motion. Blige’s
argument that she could not produce the photographs and recordings
because her devices were seized also fails, given that she did not timely
claim that those materials were unavailable to her. Therefore, because
Blige failed to demonstrate mistake, surprise, excusable neglect,
inadvertence, or other excuse that amounted to good cause, we perceive no
abuse of discretion in the district court’s denial of her motion to set aside
the default.
Claims that were not pleaded cannot be tried by implied consent against a
defaulting party
Although Terry contends the argument was waived, Blige
permissibly argues on appeal that the district court erred when it sua
sponte amended the pleadings to include an unpleaded claim of extortion.
Blige argues the district court erred by relying on NRCP 15(b)(2) to find
that she and Terry imphedly consented to trying extortion as a tort claim
because Nevada does not recognize a tort of extortion. We need not resolve
whether a party may sue for an extortion tort in Nevada, however, because
we conclude that a defaulting party cannot be found to have impliedly
consented to try a claim under NRCP 15(b)(2) if the claim was not pleaded
in the complaint, even for a clearly established cause of action,
We review a district court’s legal conclusions regarding court
rules for an abuse of discretion. Casey v. Wells Fargo Bank, N.A., 128 Nev.
713, 715, 290 P.38d 265, 267 (2012). NRCP 15(b)(2) provides that when an
issue that is not raised in the complaint is “tried by the parties’ express or
implied consent, it must be treated in all respects as if raised in the
pleadings.” An amendment by implied consent is permissible “if prejudice
does not result.” Schwartz v. Schwartz, 95 Nev. 202, 205, 591 P.2d 1137,
1139 (1979) (internal quotation marks omitted).
After default, when a plaintiffs claim is for an amount of
damages that is uncertain, the plaintiff must apply to the district court for
a default judgment. NRCP 55(b)(2). Further, if the defendant has
appeared, the defendant must be served with written notice at least seven
days before the district court conducts a prove-up hearing on the default
judgment. Jd. The purpose of this prove-up hearing is lmited to
determining the amount of damages, conducting an accounting,
establishing the truth of any allegation by evidence, and investigating any
other matter. Id.Generally, “[a] default judgment must not differ in kind from,
or exceed in amount, what is demanded in the pleadings.” NRCP 54(c). See
generally Mitchell v. Mitchell, 28 Nev. 110, 79 P. 50, 50 (1904) (concluding
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in default “the relief granted to the plaintiff, if there be no answer, shall not
exceed that which... [was] demanded in [the] complaint”). However, we
have held that when a defaulting party has failed to comply with a discovery
order, a plaintiff can amend their complaint to conform with the evidence
presented at the prove-up hearing to support a damages award. Hamlett v.
Reynolds, 114 Nev. 863, 866, 963 P.2d 457, 459 (1998); see also Kelly Broad.
Co. v. Sovereign Broad., Inc., 96 Nev. 188, 192-93, 606 P.2d 1089, 1092
(1980) (concluding plaintiff could amend his prayer for relief to conform to
the trial evidence for additional amounts that were not pleaded when the
defaulting party failed to comply with a court order), superseded by statute
on other grounds as recognized in Countrywide Home Loans, Inc. v.
Thitchener, 124 Nev. 725, 741 n.39, 192 P.3d 243, 254 n.39 (2008). We have
not addressed whether a defaulting party may impliedly consent to an
unpleaded claim being tried against them in default proceedings.
The Alabama Court of Appeals has addressed the issue in an
appeal from a default divorce decree. Maxwell v. Maxwell, 188 So. 3d 695(Ala. Civ. App. 2015). In that case, after the wife defaulted on the divorce
claims regarding property distribution, the husband claimed at the prove-
up hearing that he should be awarded attorney fees, although he did not
plead for such in his complaint. Jd. at 696. The final judgment included a
$5000 award for the unpleaded request for attorney fees. Id. When the wife
appealed, the husband argued that the claim was tried by implied consent
at the divorce proceedings under Alabama Rules of Civil Procedure 15(b)
because the issue was raised at trial when his attorney asked if he was
requesting attorney fees and because the wife, who was not present at trial,
failed to object. Jd. at 697. In rejecting that argument, the court noted that
an issue cannot be tried by implied consent if the opposing party is absent
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from the proceedings and that “[a] party should have the right to assume
that a court’s judgment following his default will not extend beyond the
issues presented by the complaint.” Jd. (internal quotation marks omitted).
Cf. Matsushima v. Rego, 696 P.2d 843, 845-46 (Haw. 1985) (concluding
under Hawau’s Rule 54(c) that judgment as to quieting title was void
because it was not requested in the pleadings); In re Marriage of Hughes,
116 P.3d 1042, 1043, 1046 (Wash. Ct. App. 2005) (internal quotation marks
omitted) (determining under Washington’s Rule 54(c) that “a court has no
jurisdiction to grant relief beyond that sought in the complaint” and must
“vacate the default to the extent it differed from the original [complaint]”
when the plaintiff alleged she was not pregnant yet changed her pregnancy
status and denied her husband’s paternity in her default dissolution
decree),
Unlike the wife in Maxwell, Blige was present at the prove-up
hearing. But the defaulting party’s presence at a damages prove-up hearing
is inapposite to a determination of their liability on a claim that was not
pleaded and on which they therefore could not have defaulted. A defaulting
party who has made an appearance in the case receives notice of the prove-
up hearing. At that point, the defaulting party can assess the claims
pleaded against them and the potential damages arising from those claims.
On that basis, they may decide not to attend the hearing to contest those
damages. A default judgment that reflects those claims and related
damages will be entered against them as a result. Likewise, a defaulting
party who attends the hearing receives notice of the claims pleaded against
them and that the damages arising from those claims will be tried at the
prove-up hearing. Therefore, the default judgment entered against a
defaulting party who attends the hearing must similarly be limited to
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damages for the claims pleaded against them. In this regard, we agree with
the Alabama appellate court and conclude that, in default proceedings, a
defaulting party cannot be found to have impliedly consented to try and be
held liable for claims that were not pleaded in the complaint. Accordingly,
the district court erred by finding in the default judgment that Blige
impliedly consented to try the unpleaded tort of extortion.
The district court did not err in admitting evidence
Bhlge argues that the district court abused its discretion by
admitting evidence related to Bitcoin transfers to Blige and to Terry's car
dealer, text messages, and Bitcoin valuations. We review a district court's
decision to admit evidence for an abuse of discretion. Sheehan & Sheehan
vu. Nelson Malley & Co., 121 Nev. 481, 492, 117 P.3d 219, 226 (2005).
Nevada’s evidence code provides that “[t]he requirement of authentication
or identification as a condition precedent to admissibility is satisfied by
evidence or other showing sufficient to support a finding that the matter in
question is what the proponent claims.” NRS 52.015(1). “The testimony of
a witness is sufficient for authentication or identification if the witness has
personal knowledge that a matter is what it is claimed to be.” NRS 52.028.
The district court did not abuse tts discretion in admitting evidence
related to Bitcoin transfers and text messages
Blige argues that Terry failed to authenticate screenshots of
Bitcoin transfers to her and to Terry’s car dealer, as well as copies of text
messages between Terry and “Ava,” “AvaLavaa,” and “Ava 2.” When a text
message's admissibility is objected to on authentication grounds, the
proponent of such evidence must explain the purpose for which they are
offering the text message and “provide sufficient direct or circumstantial
corroborating evidence of [its] authorship.” Rodriguez v. State, 128 Nev.
155, 162, 273 P.3d 845, 849 (2012) (internal citation omitted). “Thus, some
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additional evidence, which tends to corroborate the identity of the sender,
is required.” Jd. at. 161, 273 P.3d at 849 (internal quotation marks omitted).
This evidence “may include the context or content of the messages
themselves.” Id.Regarding the Bitcoin transfers, Terry testified that he took the
screenshots showing the transfers on his phone. He testified that the
screenshots depict Bitcoin transactions from his wallet to Blige. Terry
testified that all the transactions at issue were transfers to Blige. Similarly,
Terry testified that the screenshot exhibit presented in the prove-up
hearing depicted a transfer of funds to his car dealer to purchase cars for
Blige. This corroboration was sufficient for the district court to determine
that Terry authenticated the screenshots of the transfers to Blige and to his
car dealer.
As to the text messages, Terry testified that “Ava,” “AvaLavaa,”
and “Ava 2” were all names attached to Blige’s phones. He testified that
Blige had several phone numbers and that she occasionally spoke on the
phone with him using the Ava 2 number. Terry also identified the general
time period when the text messages were sent, which was during the alleged
extortion. Even Blige testified during the hearing that she was the recipient
and Terry was the sender of one of the messages. Terry offered copies of the
text messages to show that Blige threatened him with exposure of personal
information. Further, the contents of the messages were consistent with
Blige and Terry being in a relationship. One of the text messages included
a photograph of Blige and Terry posed together while traveling in Europe.
In others, the sender “Ava 2” referred to Terry as “baby” or “love.” Thus,
the content of the text messages also provides circumstantial evidence that
“Ava,” “AvaLavaa,” and “Ava 2” are Blige. Rodriguez, 128 Nev. at 162, 273
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P.3d at 849. Accordingly, the district court properly determined that Terry
authenticated the text messages and acted within its discretion by
admitting and considering the screenshots of the Bitcoin transfers and the
text messages.
Blige also contends that admitting the text messages violated
the best evidence rule. Terry offered the screenshots to prove the content
of the text messages, which show that Blige threatened to publish photos
and recordings of him. Terry’s screenshots satisfy the best evidence rule
because Blige has not raised a genuine question regarding the authenticity
of the original text messages or shown that it would be unfair to use
duplicates, i.e., screenshots of the original text messages. NRS 52.245(1)
(addressing best evidence requirements). Blige provides no support that it
was unfair to use the screenshots in lieu of the originals or that she was not
the text messages author. Jd. Accordingly, we conclude the screenshots
did not violate the best evidence rule.
The district court did not abuse its discretion by admitting the
evidence related to the Bitcoin valuations
Blige contends that the district court erred in accepting Terry's
valuation of the Bitcoin transferred to Blige from May 17, 2019, to October
2020. She argues that Terry failed to provide authority to support his
calculation and that he did not establish the Wall Street Journal as a
reliable source for cryptocurrency valuations.
This court reviews a district court’s calculation of damages for
an abuse of discretion. Flamingo Realty, Inc. v. Midwest Dev., Inc., 110 Nev.
984, 987, 879 P.2d 69, 71 (1994). NRS 47.130(2)(b) provides that a court
may take judicial notice of facts “[clapable of accurate and ready
determination by resort to sources whose accuracy cannot be reasonably
questioned, so that the fact is not subject to reasonable dispute.”
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As evidence of the Bitcoins’ value during the relevant period,
Terry relied on the Wall Street Journal Pro Central Banking’s historical
Bitcoin price for each corresponding date of transfer. This process involved
taking the average of the “open amount, high, low, and close amount” of the
Bitcoin value on the date of transfer and multiplying it by the amount of
Bitcoin transferred. The district court found that the Wall Street Journal
Pro Central Banking was a legitimate source and took judicial notice of its
valuations. See Fierle v. Perez, 125 Nev. 728, 737 n.6, 219 P.3d 906, 912 n.6
(2009) (observing that courts may take judicial notice of facts “capable of
verification from a reliable source”), as modified (Dec. 16, 2009), overruled
on other grounds by Egan v. Chambers, 129 Nev. 239, 240-41, 299 P.3d 364,
365 (2013). Blige does not dispute the numbers or provide any reason why
the Wall Street Journal did not reflect accurate pricing. Thus, we conclude
that Blige has not shown that the district court abused its discretion by
taking judicial notice of the Wall Street Journal price records to calculate
the Bitcoin valuation.
Terry made prima facie showings of conversion, unjust enrichment, and
intentional infliction of emotional distress to support the damages awards
Blige argues that the district court impermissibly awarded
Terry damages for conversion, unjust enrichment, and intentional infliction
of emotional distress. Specifically, Blige contends damages were
impermissibly awarded because Terry failed to make prima facie showings
of conversion, as he did not make a demand, and of intentional infliction of
emotional distress, as he only experienced stress.
A district court’s decision to enter a default judgment as a
discovery sanction is reviewed for abuse of discretion. Kelly, 96 Nev. at 192,
606 P.2d at 1092. When default judgment is entered “as a discovery
sanction, the nonoffending party need only establish a prima facie case.”
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Young v. Johnny Ribeiro Bldg., Inc., 106 Nev. 88, 94, 787 P.2d 777, 781
(1990). To do so, the nonoffending party must present sufficient evidence
“for each cause of action as well as demonstrat[e] by substantial evidence
that damages are attributable to each claim” and their amounts are proven.
Foster v. Dingwall, 126 Nev. 56, 60, 68, 227 P.38d 1042, 1045, 1050 (2010);
see Weddell v. H20O, Inc., 128 Nev. 94, 101, 271 P.3d 7438, 748 (2012)
(‘Substantial evidence is evidence that a reasonable mind might accept as
adequate to support a conclusion.” (quoting Whitemaine v. Aniskovich, 124
Nev. 302, 308, 183 P.3d 137, 141 (2008))), abrogated on other grounds by
Tahican, LLC v. Highth Judicial Dist. Court, 139 Nev., Adv. Op. 2, 525 P.3d
550, 554 (2023). Further, the nonoffending party must “show that the
amount of damages sought is...designed to either compensate the
nonoffending party or punish the offending party.” Foster, 126 Nev. at 64,
227 P.3d at 1047. During the prove-up hearing, the district court considers
the allegations in the pleadings deemed admitted in determining “whether
the nonoffending party has established a prima facie case for liability.” Jd.
at 67, 227 P.3d at 1049-50.
The transfer of property under duress can constitute conversion, and
in such cases, demand is not required
Blige argues that Terry did not make a prima facie case for
conversion because he did not show that he demanded the return of his
property or that such demand would be futile. Nevada appellate courts
have yet to address whether a party may successfully assert a claim for
conversion when that party turns over property to another based on an
arrangement that inherently involves duress, and if so, whether a demand
is required,
In Wantz v. Redfield, we defined conversion “as a distinct act of
dominion wrongfully exerted over another's personal property in denial of,
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or inconsistent with his title or rights therein or in derogation, exclusion, or
defiance of such title or rights.” 74 Nev. 196, 198, 326 P.2d 413, 414 (1958).
Conversion does not require a manual or physical taking of property. Bader
v. Cerri, 96 Nev. 352, 357 n.1, 609 P.2d 314, 317 n.1 (1980), overruled in
part on other grounds by Evans v. Dean Witter Reynolds, Inc., 116 Nev. 598,
608, 5 P.3d 1043, 1050 (2000). Indeed, tangible and intangible property
alike can be converted. M.C. Multi-Family Dev., LLC v. Crestdale Assocs.,
Ltd., 124 Nev. 901, 904, 193 P.3d 536, 538-39 (2008). The effect of the act
is critical to conversion, not the converter’s intent, and thus conversion is
sufficiently shown when an owner is deprived of their property by the
wrongful act of another who assumes dominion over the property. See
Studebaker Bros. Co. of Utah v. Witcher, 44 Nev. 442, 462, 195 P. 334, 340
(1921). However, conversion must “be essentially tortious,” meaning it
must be an unlawful act. Wantz, 74 Nev. at 198, 326 P.2d at 414 (internal
quotation marks omitted).
To that end, other state courts have recognized that conversion
includes takings induced by duress. For example, the Supreme Court of
Oregon stated, “[i]t is a conversion to obtain chattel property from another
by duress.” Gowin v. Heider, 386 P.2d 1, 18 (Or. 1963). The court affirmed
on rehearing that it would be “an unlawful interference with the true
owner’s dominion” for a wrongdoer to take possession of a motor vehicle by
using duress to obtain a power of attorney from the true owner. Gown v.
Heider, 391 P.2d 630, 636 (Or. 1964). Similarly, the highest court of
Maryland held that “conversion may consist of a wrongful, tortious or
unlawful taking of property from the possession of another by theft,
trespass, duress, or fraud and without his consent or approbation, either
express or implied.” Saunders v. Mullinix, 72 A.2d 720, 722 (Md. 1950).
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And the Supreme Court of Mississippi has concluded that there is no
hability for conversion if possession was assented to, “unless the assent was
obtained by duress or from one lacking capacity to consent or was obtained
or acted upon fraudulently.” Latimer v. Stubbs, 161 So. 869, 869 (Miss.
1935) (internal quotation marks omitted); see also Restatement (Second) of
Torts § 221(b) (Am. Law Inst. 1965) (recognizing that a conversion may be
committed by intentionally “obtaining possession of a chattel from another
by fraud or duress”); td. § 223(a) (A conversion may be committed by
intentionally ... dispossessing another of a chattel as stated in §§ 221 and
QOD a de
We agree with these courts. Moreover, we note that, while
conversion may be established by the refusal of a demand for the property,
Ward v. Carson River Wood Co., 13 Nev. 44, 61 (1878), superseded by statute
on other grounds as stated in Menteberry v. Giacometto, 51 Nev. 7, 12, 267
P. 49, 50 (1928), a demand for return of converted property is not required
when the “holder [of the property] asserts ownership,” W. Indus., Inc. v.
Gen. Ins. Co., 91 Nev. 222, 230, 533 P.2d 473, 478 (1975): see also Ward, 18
Nev. at 61-62 (‘When there has been an actual conversion, no demand is
necessary in order to sustain the action of trover.”). Thus, when property is
unlawfully obtained through duress, no demand is required.
Here, Terry alleged that he transferred the Bitcoin and money
for cars to Blige under duress, to protect himself, because Blige was
threatening to publicly release his highly personal information unless he
complied with her demands. Blige’s threats were thus wrongful acts used
to obtain dominion over Terry’s personal property rights. To compensate
Terry, the district court awarded him the value of the Bitcoin and the cash
used to purchase cars transferred to Blige. Relatedly, the district court
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awarded Terry the value of the converted Bitcoin as punitive damages to
punish Blige. Terry properly supported the calculation of the converted
Bitcoin and cash with exhibits and the historical Bitcoin price records.
Accordingly, we conclude that the district court did not abuse its discretion
by finding that Terry established a prima facie case for conversion and
awarding damages. !
The district court properly awarded damages for Terry’s claim of
intentional infliction of emotional distress
Blige argues that Terry failed to establish a prima facie showing
of intentional infliction of emotional distress because Terry's stress was
insufficient to support severe or extreme emotional distress. Intentional
infliction of emotional distress has four elements: “(1) extreme and
outrageous conduct on the part of the defendant; (2) intent to cause
emotional distress or reckless disregard for causing emotional distress;
(3) that the plaintiff actually suffered extreme or severe emotional distress;
and (4) causation.” Miller v. Jones, 114 Nev. 1291, 1299-1300, 970 P.2d 571,
577 (1998). The district court found that the evidence, including the Bitcoin
transfers and the text messages between Terry and Blige, was sufficient to
establish that Blige’s conduct was extreme and outrageous and that she had
intent to cause emotional distress or recklessly disregarded the likelihood
of doing so. The district court also found that Blige’s conduct actually
caused Terry extreme or severe emotional distress.
We conclude that substantial evidence supports these findings.
Specifically, with respect to the third element, Terry testified he was
'We do not reach Blige’s challenge to unjust enrichment because it
was not cogently argued. See Edwards v. Emperor’s Garden Rest., 122 Nev.
317, 330 n.38, 1380 P.3d 1280, 1288 n.38 (2006).
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stressed, and he texted Blige that he had trouble sleeping, had to worry
every second, and was afraid. We perceive no error in the district court’s
conclusion that Blige’s conduct caused Terry to succumb to numerous
extortions, resulting in him transferring Bitcoin to Blige on 70 occasions to
protect himself. Terry’s compliance under threat with Blige’s outrageous
demands for numerous Bitcoin transfers are objectively verifiable indicia
that he suffered extreme or severe emotional distress, and Blige’s
outrageous conduct was so extreme that Terry was not required to show
more. See Miller, 114 Nev. at 1300, 970 P.2d at 577 (concluding district
court did not err in rejecting claim of intentional infliction of emotional
distress when the plaintiff “presented no objectively verifiable indicia of the
severity of his emotional distress”); Franchise Tax Bd. of State of Cal. v.
Hyatt, 133 Nev. 826, 855, 407 P.3d 717, 742 (2017) (concluding when “facts
support the conclusion that th[e] ... [conduct] is at the more extreme end
of the scale...less in the way of proof as to emotional distress
suffered ...is necessary’), rev'd and remanded on other grounds sub nom.
Franchise Tax Bd. of Cal. v. Hyatt, _. U.S. ___, 189 8. Ct. 1485 (2019). We
conclude the district court was in the best position to evaluate the testimony
and the veracity of the manifestations of Terry’s distress. To compensate
Terry, the district court awarded him $70,000. The award was attributable
to Terry’s claim for intentional infliction of emotional distress because it
was for $1000 for each of the 70 times Blige obtained Bitcoin from Terry by
threatening him. Thus, the district court found each independent threat
sufficiently extreme or outrageous to merit an award of $1000. We
determine that substantial evidence supports the district court’s finding
that Terry established a prima facie case for intentional infliction of
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emotional distress, and we perceive no error in its resulting award of
damages.*
CONCLUSION
Because a party cannot default on claims that were not pleaded
in the complaint, the defaulting party cannot be found to have impliedly
consented to try claims unless the plaintiff included the claims in their
pleadings. Regarding the district court’s conclusion that the facts supported
Terry’s claim for conversion, we agree, because although Terry transferred
the cryptocurrencies and money for cars in exchange for Blige’s promise not
to reveal personal information about Terry, that arrangement inherently
involved duress. We conclude that when a party uses duress to obtain
wrongful dominion over another’s property, that act of duress properly
supports a claim for conversion under Nevada law. As to the remaining
issues, we conclude that the district court acted within its discretion by
denying the motion to set aside the default and by admitting the evidence
that Blige challenged. It likewise properly exercised its discretion by
awarding damages based on its findings that Terry made prima facie
showings of conversion, unjust enrichment, and intentional infliction of
emotional distress. Thus, we affirm the district court’s judgment as to those
claims. We conclude, however, that the district court erred by finding that
Blige impliedly consented to try the claim of extortion when it was not
“We have considered Blige’s remaining arguments, including her
assertions that the district court mistakenly stated that discovery abuses
had gone on for over a year, that the NRCP 37 sanction was improper, that
some of the text messages could have been sent outside of the relevant time
period and therefore cannot prove threats during that period, that the
district court erred by taking judicial notice of DMV records, and that Terry
failed to show Blige caused his stroke, and we find no errors.
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pleaded in the complaint. Although the claim for extortion was not properly
added to the complaint, the district court’s award pertaining to that claim
is otherwise supported under theories of conversion and unjust enrichment.
Further, the award for intentional infliction of emotional distress is likewise
appropriate. Accordingly, we affirm.
We concur:
Cadish
+f
Jd.
Herndon
Y
Parraguirre
ARAL 2 Od.
Stiglich —
(. CALA, J.
Pickering
f J
ee
__ wd.
ell
21.