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Class Action for Concealment of Pacquiao Injury

  
  
  

 Poster promo for Mayweather right versus Pacquiao 600x330

 

RESPONSE AND PARTIAL JOINDER IN SUPPORT OF

 MOTION FOR COORDINATION
UNDER 28 U.S.C. § 1407

AND OPPOSITION TO PROPOSED TRANSFER VENUE

 

COME NOW
Plaintiffs Robert Neidl, Victor Bobadilla, Victor Capo, John Assalian, Gerald
F. Alessi, David Braunstein, Joseph Nick Constantino, and Howard Miller  (collectively, “Plaintiffs”), by and through
counsel, and state as follows:

  1. I.                  
    Introduction

Plaintiffs represent
nearly one-third of the twenty-five putative class actions that have been filed
against Top Rank, Inc. (“Top Rank”), Emmanuel “Manny” Pacquiao (“Pacquiao”),
and other defendants[1]
in fifteen different judicial districts across the United States.  Plaintiffs’ actions include:


  • Robert Neidl v.
    Top Rank Inc., et al.
    , No. 2:15-cv-00849-LDG-VCF
    (D. Nev.) (filed May 6, 2015).

  • Victor Bobadilla
    v. Top Rank, Inc., et al.
    , No. 1:15-cv-031387-NLH-KMW
    (D.N.J.) (filed May 6, 2015).

  • Victor Capo v. Top
    Rank, Inc., et al.
    , No. 2:15-cv-02516-TJS
    (E.D. Pa.) (filed May 7, 2015).

  • John Assalian v.
    Top Rank, et al.
    , No.
    2:15-cv-00855-GWF (D. Nev.) (filed May 6, 2015).

  • Gerald F. Alessi
    v. Top Rank, Inc., et al.
    , No. 3:15-cv-00689-RNC
    (D. Conn.) (filed May 7, 2015).

  • David Braunstein
    v. Top Rank, Inc., et al.
    , No. 15-cv-03572
    (S.D.N.Y.) (filed May 6, 2015).

  • Joseph Nick Constantino
    v. Top Rank Inc., et al.
    , No.
    3:15-CV-01025-JLS-BGS (S.D. Cal.) (filed May 7, 2015).

  • Howard Miller v. Top
    Rank, Inc., et al.
    , No. 0:15-cv-60964
    (S.D. Fla.) (filed May 8, 2015).

Plaintiffs join in the
Motion by Plaintiff Jeremy Tjaden, filed on May 8, 2015, requesting that the cases
listed in the Schedule of Actions attached thereto, and any tag-along actions, be
transferred for pre-trial coordination to a single district court pursuant to 28
U.S.C. § 1407 (“Transfer Motion”).  Plaintiffs
oppose transfer to the Central District of California, however, and suggest
that the cases instead be transferred to the District of Nevada, where the
events that gave rise to these cases occurred, and where the vast majority of
the defendants and witnesses currently reside and/or are headquartered.  Alternatively, Plaintiffs suggest that the
cases be transferred to the Southern District of New York for coordination.

  1. II.               
    Background

These cases arise
from a professional boxing match (the “Match”) that took
place on May 2, 2015 at the MGM Grand Garden Arena in Las Vegas, Nevada between
undefeated, five-division world champion Floyd “Money” Mayweather, Jr. and
eight-division world champion Manny Pacquiao. 
The Match was made available to the public via a “pay per view” telecast
produced jointly by HBO and Showtime, which could be purchased throughout the
majority of the United States at a cost of $89.95, with an additional $10
charge for high definition (“HD”).  Prior
to the Match, it was predicted that the pay per view event would bring in $270
million in revenue, but it in fact greatly exceeded these expectations,
reportedly bringing in at least $400 million in revenue – more than the Super
Bowl.

The Match itself, however,
was far less impressive.  Pacquiao lost
by unanimous decision, with a lackluster performance that was widely panned by
sports writers.  After the Match,
Pacquiao’s team revealed to the public – for the first time – that Pacquiao had
fought the Match with a torn rotator cuff in his right shoulder.  The injury had occurred in April, and was so
severe that Pacquiao had been unable to train for multiple days and had limited
use of his right arm.  Pacquiao himself
spoke to the severity of his injury following the Match, publicly stating “it’s
hard to fight one-handed.”  One of his
doctors, Dr. Neal ElAttrache, characterized the injury as a “significant tear”
of the rotator cuff that required surgery and between 9 and 12 months of
rehabilitation.

Pacquiao’s injury was also known to Pacquiao’s
opponent, Floyd Mayweather Jr., and his camp. 
Indeed, members of Mayweather’s training team have publically admitted
that they had a “mole” in the Pacquiao training camp, who informed them of his
injury and the fact that Pacquiao’s sparring partners had been sent home with
instructions to keep the injury a secret. 
Moreover, Pacquiao himself told members of the Filipino media in a
post-Match news conference that Mayweather targeted his injured shoulder during
the Match, stating: “I’m sure he found out.  Somebody leaked it to him [i.e.,
Mayweather].  They knew.”

            Despite
the widespread knowledge of Pacquiao’s injury within the boxers’ camps, no one
informed the public of the injury or of its severity, ostensibly so as not to
jeopardize the chance of a multi-million dollar payday.  Nor did anyone advise the Nevada State Athletic
Commission of the injury until just hours before the Match, presumably to avoid
the possibility of the Match being cancelled. 
This fact was confirmed by Nevada State Athletic Commission Chairman
Francisco Aguilar, who stated in a post-Match news conference that the
Commission knew nothing of any injury to Pacquiao until his camp requested a
painkilling injection in his right shoulder approximately three hours before
the Match.  Commission Chairman Aguilar
further stated that if the Commission had been informed of Pacquiao’s injury in
a timely manner, it would have ordered an MRI to confirm the injury and possibly
would have postponed the Match, depending on the severity thereof.

            But, rather than disclosing the
injury, Pacquiao’s camp actually took affirmative steps to conceal his torn
rotator cuff from the Commission, representing under oath in an official
medical disclosure form signed by Pacquiao that he had not suffered any injury
to his “shoulders, elbow, or hands that needed evaluation or examination.”  Commission Chairman Aguilar has since asked
the Nevada state attorney general’s office to investigate this misrepresentation,
stating:

Disclosure
is a big thing for us, and honesty.  The
Commission at some point will have to discuss [Pacquiao’s medical questionnaire].
 I’ve got to run through the process with
the [Nevada] Attorney General.  But they
do sign that document under the penalty of perjury.

 

Mayweather
similarly took affirmative steps to conceal Pacquiao’s injury, stating in a
pre-Match interview with Showtime that both fighters were in “tip-top”
shape. 

  1. III.            
    Transfer and Coordination Is Appropriate
    Here.

Transfer and coordination is
appropriate here because each case that is the subject of the Transfer Motion –
a well as the fifteen or so other cases that have been filed against Top Rank
and Pacquiao – relies on the same core factual allegations:  That defendants failed to disclose material
facts relating to the May 2, 2015 boxing Match between Pacquiao and Mayweather.
 Specifically, each case alleges that
defendants knew, but failed to disclose, that Pacquiao had suffered a severe
torn rotator cuff injury to his right shoulder approximately one month prior to
the Match, which injury had not healed as of the date of the Match.  Each case further alleges that, had the
public been made aware of Pacquiao’s injury, they could have made an informed
choice, inter alia, as to whether to purchase the “pay per view”
showing of the match at a cost of between $89.95 and $99.95.  As a consequence of defendants’ deceptive
conduct, however, members of the public were misled about the true state of
Pacquiao’s health, and were fraudulently induced to purchase pay per view
showings of the Match at prices set by defendants. 

Moreover, although there is some variation
in the specific causes of action asserted in the lawsuits, plaintiffs’ claims
in all of the lawsuits are grounded in fraud, misrepresentation, and unjust
enrichment on the part of defendants. 
Further, the cases propose overlapping class definitions.  Under these circumstances, transferring the
cases to a single court pursuant to 28 U.S.C. § 1407 will eliminate duplicative
discovery, prevent inconsistent rulings on a number of pre-trial issues
(including class certification), and conserve the resources of the judiciary
and the parties by avoiding much of the same work being performed multiple
times.

  1. A.        The
    Cases Involve Common Questions of Fact.

The MDL statute
makes clear that that transfer and coordination of multiple cases pending in
different districts is warranted when the cases at issue “involve one or more
common questions of fact.”  28 U.S.C. §
1407(a).  Indeed, the Panel has long held
that the presence of some disparate legal theories should not preclude transfer
and coordination where the cases share common factual questions.  See In re Merscorp Inc., et al., Real Estate
Settlement Procedures Act (RESPA) Litig
., 560 F. Supp. 2d
1371 (J.P.M.L. 2008).  Similarly, when
cases include similar factual allegations about a specific practice, service,
or good provided by a defendant to the public, the Panel has found that common
issues of fact are present, warranting transfer.  See, e.g., In re Higher One
OneAccount Mktg. & Sales Practices Litig.
, MDL No. 2407, --- F.
Supp. 2d ---, 2012 WL 6554438, at *1 (J.P.M.L. Dec. 12, 2012) (granting
transfer because “[t]he subject actions share numerous factual issues arising
from allegations of unfair and deceptive conduct in the marketing and fee
policies of the Higher One OneAccount bank account”); In re Portfolio
Recovery Associates, LLC Tel. Consumer Prot. Act Litig.
, 846 F.Supp.2d
1380, 1381 (J.P.M.L. Dec. 21, 2011) (granting transfer because “[t]hese actions
share factual questions arising out of allegations that [the defendant]
violated the federal Telephone Consumer Protection Act”); In re Frito-Lay N. Am., Inc. “All Natural”
Litig.
, MDL No. 2413, --- F. Supp. 2d ---, 2012 WL 6554657, at *1
(J.P.M.L. Dec. 12, 2012) (granting motion to transfer and finding that “that
all seven actions share factual questions arising out of allegations that
Frito–Lay markets and labels certain food products grown from genetically
modified organisms as ‘All Natural,’ in a manner that is allegedly misleading
to consumers.”); In re HannafordBros. Co. Customer Data Sec. Breach Litig.,
559 F.Supp.2d 1405, 1406 (J.P.M.L. June 9, 2008) (granting transfer because
“[a]ll of these actions arise from an intrusion into [defendant’s] computer
network.”); In re Tropicana Orange
Juice Mktg. & Sales Practices Litig.
, 867 F. Supp. 2d 1341, 1341
(J.P.M.L. 2012) (“These actions share factual questions arising out of
allegations that Tropicana deceptively markets its not-from-concentrate orange
juice as ‘100% Pure & Natural Orange Juice,’ when in fact the orange juice
is extensively processed.”); In re
Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Practices Litig.
,
844 F. Supp. 2d 1380 (J.P.M.L. 2012) (granting motion to transfer where each
case challenged representations made about organic milk); In re Enfamil Lipil Mktg. & Sales
Practices Litig.
, 764 F. Supp. 2d 1356, 1357 (J.P.M.L. 2011) (“All
actions involve common factual questions arising from the marketing and
advertising of the infant formula Enfamil LIPIL....  Plaintiffs particularly focus upon Mead’s
representations concerning the presence and/or efficacy of two nutrients ...
that are known to promote brain and eye development in infants ... and which
are contained in Enfamil LIPIL.”).

Here, as set forth
above and in the Transfer Motion, each of the cases at issue is based on the
same set of facts – specifically, that defendants failed to disclose (or
affirmatively concealed) the fact that Manny Pacquiao had suffered a torn
rotator cuff prior to his May 2, 2015 boxing match with Floyd Mayweather.  Moreover, despite pleading different causes
of action, each of these cases is premised on the single allegation that
plaintiffs are entitled to damages as a result of this material
omission/misrepresentation.  The evidence
required to prove or disprove these allegations, including documents produced
and witnesses called to testify, will be the same in each case.  Consequently, transfer and coordination is
appropriate here.

  1. B.        Transfer Will Promote the Convenience of
    the Witnesses and the Parties.

Transferring these cases to a single
district will undoubtedly promote the convenience of the witnesses and the
parties.  The majority of the relevant witnesses
in these cases will be defendants and their employees.  Absent transfer and coordination, these witnesses
would potentially be subject to multiple depositions and testimony at multiple
class certification hearings.  Defendants
also would have to produce documents in multiple jurisdictions, in response to
various document requests.  Doing these
tasks twenty-five times – one in each case – would no doubt be a significant
burden on defendants.  The requested
transfer would minimize the heavy burden that these cases proceeding separately
would otherwise place on defendants.

A single centralized and coordinated
pretrial program will promote fairness and efficiency and “eliminate
duplicative discovery, prevent inconsistent pretrial rulings, including with
respect to class certification; and conserve the resources of the parties,
their counsel, and the judiciary.”  Portfolio
Recovery Associates
, 846 F. Supp. 2d at 1381.  Absent transfer and consolidation, the
district judge in each case would be required to resolve many of the same
pretrial issues, decide similar motions, and oversee parallel discovery.

The transfer would also be convenient
to plaintiffs, as they will be able to coordinate efforts to pursue their cases
against defendants as one, without the need to attend multiple depositions of
the same witness or travel to various districts across the United States to
ensure that their clients’ rights are not adversely affected.  Accordingly, a transfer will, on the whole,
enhance the convenience of both the parties and witnesses.

  1. C.        Transfer Will Promote the Just and
    Efficient Resolution of These Cases.

The Panel has noted on numerous occasions that
transfer promotes the just and efficient resolution of actions when it will
“avoid duplicative discovery, eliminate the risk of inconsistent pretrial
rulings on class certification and other pretrial matters, and conserve the
resources of the parties, their counsel, and the judiciary.”  See, e.g., In re Shop-Vac Mktg. & Sales Practices
Litig.
, MDL No. 2380, 2012 U.S. Dist. LEXIS 117365, at *2 (J.P.M.L.
Aug. 16, 2012) (granting transfer of six putative class actions involving
claims of deceptive marketing); In
re Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Practices Litig.
,
844 F. Supp. 2d 1380 (J.P.M.L. 2012) (granting motion to transfer five putative
class actions involving claims of deceptive marketing about organic milk); In re Tropicana Orange Juice Mktg. &
Sales Practices Litig.
, 867 F. Supp. 2d 1341, 1341 (J.P.M.L. 2012)
(granting transfer of six putative class actions in five districts involving
claims of deceptive marketing about orange juice); In re Park W. Galleries, Inc., 645 F. Supp. 2d 1358
(J.P.M.L. 2009) (granting transfer of three putative class actions involving
claims of fraudulent sales of art during shipboard auctions); In re Vertrue Mktg. & Sales Practices
Litig.
, 626 F. Supp. 2d 1318 (J.P.M.L. 2009) (granting transfer of
three putative class actions involving claims of deceptive marketing of free
trial offers).

Because all of these cases arise from the
common nucleus of facts, it is a near certainty that discovery in each will encompass
most, if not all, of the same topics.  Transferring
the cases will ensure coordinated discovery and eliminate duplicative discovery
on these and other factual issues.  Moreover,
the cases raise a number of overlapping legal issues.  For example, multiple cases assert violations
of the consumer fraud statutes of Nevada and California, and nearly every case
asserts common law claims of unjust enrichment.  Absent coordination, multiple courts will be
considering and deciding the same legal issues at the same time, risking
inconsistent rulings. See, e.g., In re Tropicana Orange
Juice Mktg. & Sales Practices Litig.
, 867 F. Supp. 2d 1341, 1341
(J.P.M.L 2012) (“Centralization will eliminate duplicative discovery; prevent
inconsistent pretrial rulings, including with respect to class certification;
and conserve the resources of the parties, their counsel, and the judiciary.”);
In re Chrysler LLC 2.7 Liter V-6
Engine Oil Sludge Prods. Liab. Litig.
, 598 F. Supp. 2d 1372, 1373
(J.P.M.L. 2009) (granting transfer of five putative statewide class claims with
“nearly identical” factual allegations because doing so would allow one judge
to “streamline proceedings and make consistent rulings on discovery disputes,
dispositive motions, and issues relating to experts.”).

Likewise, absent coordination there is a
risk of inconsistent rulings on class certification. Several of the putative
classes overlap.  Specifically, at least
eight of pending cases – including the Neidl and Assalian cases –
seek to certify a nationwide class under various causes of action.  And a number of cases seek to certify classes,
e.g., of California and Pennsylvania consumers.  This Panel has held that the presence of such
competing class actions “amplifies the need to have a single judge oversee the
[proceedings].”  In re Cuisinart Food
Processor Antitrust Litig.
, 506 F. Supp. 651, 655 (J.P.M.L. Jan. 16,
1981).  Absent coordination, multiple
courts could issue inconsistent rulings about the propriety of class
certification in these cases.  See, e.g., In re Portfolio Recovery Assocs., LLC, 846
F. Supp. 2d 1380, 1381 (J.P.M.L. 2011) (noting that centralization would
“eliminate the risk of inconsistent rulings on class certification” where
statewide classes were “subsumed” by nationwide class); In re Charlotte
Russe, Inc., Fair and Accurate Credit Trasnactions Act (FACTA) Litig.
, 505
F. Supp. 2d 1377, 1378 (J.P.M.L. Aug. 30, 2007) (“Centralization will … prevent
inconsistent pretrial rulings, especially with respect to class
certification[.]); In re Sugar Indus. Antitrust Litig., 395 F. Supp.
1271, 1273 (J.P.M.L. June 2, 1975) (“We have consistently held that transfer of
actions under 1407 is appropriate, if not necessary, where the possibility of
inconsistent class determination exists.”); see also
David F. Herr, Multidistrict Litigation Manual § 5.24 (2012) (explaining
that the existence of potentially conflicting class actions is a “dominating”
factor in favor of transfer).  Consequently, transfer and coordination is
appropriate here.

IV.       Plaintiffs Seek Transfer to the
District of Nevada.

Plaintiffs suggest
that the Panel transfer these cases for coordination to the District of Nevada
– where at least three cases have been filed – for the following reasons:

  1. A.               
    The Majority of
    Defendants Reside or Are Headquartered in Nevada.

In the past, the Panel
has considered where the headquarters of the majority of defendants are located
in selecting a transfer venue.  In re
Amino Acid Lysine Antitrust Litig.,
910 F. Supp. 696, 699 (J.P.M.L.1995)
(selecting transfer forum based, inter alia, on where two of five
defendants’ headquarters were located).  Here,
the majority of the defendants reside or are headquartered in Nevada –
defendants Top Rank and Mayweather Promotions are headquartered in Nevada, and
defendants Mayweather, Arum, and Roach all reside there.  Thus, it is submitted that this factor
strongly favors MDL consolidation/coordination in Nevada.

  1. B.                
    The Majority of
    the Witnesses and Documents Are Most Likely Located in Nevada.

The Panel may also
consider the location of relevant documents and evidence in determining a
transfer venue.  In re Corrugated
Container Antitrust Litigation,
441 F. Supp. 921, 924, (J.P.M.L.1977).  As indicated above, the majority of the defendants
named in the cases currently proposed for MDL coordination – including two of
the corporate defendants – reside or are headquartered in Nevada.  Thus, it is likely that any documents in the
possession of these defendants are also located in Nevada.  Moreover, since the Match occurred in Nevada,
it is likely that the vast majority of non-party witnesses who possess
information relevant to plaintiffs’ claims are also located in Nevada, and
would be within the District of Nevada’s subpoena power should these cases be
transferred to that district.  Further,
the Nevada State Athletic Commission and the Nevada State Attorney General,
both of whom are investigating (or contemplating investigation of) the facts
surrounding the Match are located in Nevada. 
Accordingly, the District of Nevada is the most convenient forum for
these cases, as it is the district where the largest single concentration of
witnesses and relevant documents in these actions are located.

  1. C.               
    Other Factors
    Support Transfer to the District of Nevada.

Several other
factors support the transfer of these cases to a coordinated proceeding in the
District of Nevada.  It is the district
where the first case was filed.  See
In re Ortho Evra Prods. Liab.
Litig.
, 422 F. Supp. 2d 1379, 1381 (J.P.M.L. 2006) (transfer to
district with first filed action that was also relatively centrally located to
the actions).  At least two plaintiffs
reside in that district.  See Vanel
Compl. (Ex. B).  Although located near
the west coast, Las Vegas – the division where the three District of Nevada
cases are currently pending – has a large, international airport that will facilitate
counsel’s travel to and from the district courthouse. 

Moreover, the
District of Nevada has had prior experience handling multi-district litigations,
and the three judges in the district to whom these cases have been assigned –
District Judge Lloyd D. George in the Neidl case, District Judge Andrew P. Gordon in
the Assalian case, and District Judge Miranda M. Du in the Vanel
case – are experienced jurists who are more than capable of handling a complex
litigation such as this one.  In
particular, District Judge Lloyd D. George has handled two MDLs in the
past:  In re: Republic Mineral Corp.
SEC
, MDL 686 and In Re: NOS Communications, Inc. Billing Practices,
MDL 1357.  Currently, the District of
Nevada has just two pending MDLs, far less than many of the other districts
where these cases are pending (e.g., there are currently eighteen MDLs
in the District of New Jersey, seventeen apiece in the Northern District of
Illinois and Eastern District of Pennsylvania; fourteen in the Central District
of California; nine in the Eastern District of New York; eight in the Southern
District of Florida; and seven in the Southern District of California).

Finally, as the vast
majority – if not all – of the acts complained of in Plaintiffs’ complaints
occurred in Nevada, there is a distinct possibility that Nevada law may apply
to all claims in these cases.  Consequently,
it is submitted that the District of Nevada is the most appropriate venue for
the proposed MDL. 

  1. D.               
    In the
    Alternative, Plaintiffs Suggest that the MDL Be Assigned to Judge Scheindlin in
    the Southern District of New York.

In the
alternative, Plaintiffs suggest the Panel transfer these cases for coordination
to New York City and the Southern District of New York.  Two of the named defendants in these cases,
Home Box Office, Inc. and Showtime Networks, Inc. are both located in New York
City, and many of the documents from these two defendants will be located
there.  

Furthermore,
for parties not located in New York, relevant witnesses can readily travel to
New York, which is of course a central transportation hub served by three major
airports.  See e.g. In
re Merck & Co., Inc. Sec., Deriv., & “ERISA” Litig.
, 360 F. Supp.
2d 1375, 1377 (J.P.M.L. 2005) (transferring to a district court that “is
relatively conveniently located for the parties and witnesses taken as a
whole.”).  Given that some of the parties
and potential witnesses will be required to travel regardless of where the
related cases are transferred, the ready accessibility and availability of
frequent air service and travel accommodations are another reason for selecting
New York City as the appropriate forum site. 
See In re Enron Corp. Sec., Derivative & “ERISA” Litig.,
196 F. Supp. 2d 1375, 1376-77 (J.P.M.L. 2002) (transferring litigation to a
district court “in a major metropolitan center that is well served by major
airlines, provides ample hotel and office accommodations, and offers a well
developed support system for legal services.”). 
Accord In re Laughlin Products, Inc., Patent Litig., 240
F. Supp. 2d 1358, 1359 (J.P.M.L. 2003) (transferring to “an accessible
metropolitan district”).

The JPML
also considers whether a potential transferee forum has the necessary resources
and expertise to handle the consolidated litigation.  See e.g., In re Methyl
Methacrylate (MMA) Antitrust Litig.
, 435
F. Supp. 2d 1345, 1347 (J.P.M.L. 2006) (transferring to a district that “is
well equipped with the resources that this complex antitrust docket is likely
to require”); In re Sulfuric Acid Antitrust Litig., 270 F. Supp. 2d
1379, 1380 (J.P.M.L. 2003) (concluding that the transferee forum was “equipped
with the resources that this complex antitrust docket is likely to require”); In
re Ace Ltd. Sec. Litig.
, 370 F. Supp. 2d 1353, 1355 (J.P.M.L. 2005)
(concluding that the transferee forum “possesses the necessary resources and
expertise to be able to devote the time and effort to pretrial matters that
this docket is likely to require”).  The
Southern District of New York is a large urban court well-equipped to handle
this complex litigation.

The
potential transferee judge’s experience is also a factor in determining the
appropriate transferee forum.  See
e.g., In re Vision Serv. Plan Tax Litig., 484 F. Supp. 2d 1356,
1357 (J.P.M.L. 2007) (“[W]e are assigning this litigation to an experienced
jurist with the ability to steer this litigation on a prudent course”);  In re African-Am. Slave Descendants Litig.,
231 F. Supp. 2d 1357, 1358 (J.P.M.L. 2002) (transferee forum is proper where
“the judge assigned to the action pending in this district is a seasoned jurist
who can steer this litigation on a steady and expeditious course”); In re
New Motor Vehicles Canadian Export Antitrust Litig.
, 269 F. Supp. 2d 1372,
1373 (J.P.M.L. 2003) (“[W]e have searched for a transferee judge with the time
and experience to steer this litigation on a prudent course.”).  Judge Scheindlin is a highly credentialed and
experienced jurist who has served on the federal bench since 1994 and presided
over numerous complex and multi-faceted cases, and would be an appropriate
judge to preside over this complex litigation. 
Judge Scheindlin would undoubtedly administer these cases ably and
efficiently.

V.        Conclusion

The cases that are the
subject of the Transfer Motion have substantively identical factual allegations
and similar legal claims, will require duplicative discovery, and have proposed
overlapping class definitions.  The
convenience of the witnesses and the parties, and the efficient and just resolution
of these cases are all best served by transferring them for coordination to a
single district court.  Consequently, Plaintiffs
Neidl, Bobadilla, Capo, Assalian, Alessi, Braunstein, Constantino, and Miller respectfully
join in the request that the Panel grant the Transfer Motion, and moreover
request that the cases be transferred to the District of Nevada for
coordination.   

                                                           

Dated:  May 11, 2015                                                 Respectfully
submitted,

 

                                                                                    /s/ Stephen P. DeNittis

                                                                                    Stephen
P. DeNittis, Esquire

                                                                                    DeNittis
Osefchen, P.C.

                                                                                    525
Route 73 North, Suite 410

                                                                                    Marlton,
NJ 08053

                                                                                    Tel:  856-797-9951

                                                                                    Fax:  856-797-9978

                                                                                    Email:  sdenittis@denittislaw.com

 

Counsel for Plaintiffs Robert Neidl, Victor Bobadilla, and Victor Capo

 

KAPLAN FOX & KILSHEIMER LLP

Laurence D. King (applying for admission pro hac vice)

Linda M. Fong (applying for admission pro hac vice)

Mario M. Choi  (applying for
admission pro hac vice)

350 Sansome Street, Suite 400

San Francisco, CA 94104

Telephone:  415-772-4700

Facsimile:   415-772-4707

Email:  lking@kaplanfox.com

            lfong@kaplanfox.com

            mchoi@kaplanfox.com

 

Frederic S. Fox (applying for admission pro hac vice)

KAPLAN FOX & KILSHEIMER LLP

850 Third Avenue

New York, NY  10022

Telephone: (212) 687-1980

Facsimile:   (212) 687-7714

Email:  ffox@kaplanfox.com

 

ALBRIGHT, STODDARD, WARNICK & ALBRIGHT

 

G. Mark Albright

William H. Stoddard, Jr.

801 S. Rancho Drive, Suite D-4

Las Vegas, NV  89106

Telephone:  (702) 384-7111

Facsimile:  (702) 384-0605

Email: gma@albrightstoddard.com

            whs@albrightstoddard.com

 

Counsel for Plaintiff John
Assalian

 

WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP

 

Gregory M. Nespole

Matthew M. Guiney

Robert Y. Altchiler

270 Madison Ave.

New York, NY 10016

Telephone:       212-545-5600

Facsimile:        212-545-4605

Email:  Nespole@whafh.com

            Guiney@whafh.com

            Altchiler@whafh.com

 

Counsel for Plaintiffs Alessi, Braunstein, Constantino, and Miller

 

Abbas Kazerounian, Esq.

KAZEROUNI LAW GROUP, APC

Abbas Kazerounian, Esq.

ak@kazlg.com

245 Fischer Avenue, Unit D1

Costa Mesa, CA 92626

Telephone: (800) 400-6808

Facsimile: (800) 520-5523

 

Joshua B. Swigart, Esq.

HYDE & SWIGART

josh@westcoastlitigation.com

2221 Camino Del Rio South, Suite 101

San Diego, CA 92108

Telephone: (619) 233-7770

Facsimile: (619) 297-1022

 



[1] Other defendants
named in some, but not all, of the cases are:  Robert Arum (“Arum”), Floyd Mayweather Jr.
(“Mayweather”); Mayweather Promotions LLC (“Mayweather Promotions”); Michael
Koncz (“Koncz”); Todd Duboef (“Duboef”); Frederick Steven Roach (“Roach”); Home
Box Office, Inc. (“HBO”); Showtime Networks, Inc. (“Showtime”); AT&T, Inc.
(“AT&T”); Comcast Corp. (“Comcast”); and DirecTV, Inc. (“DirecTV”).

 

Breach of Contract: When a Good Deal Goes Bad.

  
  
  

Anticipatory Breach 

PARTIES


  1. Plaintiff, STEPHEN HUNDLEY (“Hundley”) is, and at all
    relevant times was, a citizen of the State of Nevada, residing in Clark County,
    Nevada.

  2. Plaintiff,
    PAUL VALDEZ (“Valdez”), is, and at all relevant times was, a citizen of the State of
    Nevada, residing in Clark County, Nevada.

  3. Upon information and belief, Plaintiff, JARED HEMPEL (“Hempel”), is, and at all
    relevant times was, a citizen of the State of Nevada, residing in Clark County,
    Nevada.

  4. Upon information and belief, Plaintiff,
    TONOPAH ASSET MANAGEMENT INC. (“Tonopah Asset Management”), is a Domestic Corporation, doing business in the
    State of Nevada, County of Clark.

  5. Upon information and belief,
    Defendant, DEREK SCHAEFER (“Derek”), is,
    and at all relevant times was, a citizen of the State of Nevada, residing in
    Clark County, Nevada.

  6. Upon information and belief,
    Defendant, J. MICHAEL SCHAEFER (“J. Michael”), is, and at all relevant
    times was, a citizen of the State of Nevada, residing in Clark County, Nevada.

  7. Upon information and belief,
    Defendant, MICHAEL SCHAEFER (“Michael”), is, and at all relevant times
    was, a citizen of the State of Nevada, residing in Clark County, Nevada.

  8. Upon information and belief,
    Defendant, SCHAEFER-NEVADA, INC. (“SNI”), is a Domestic Close Corporation, doing business in the State of Nevada,
    County of Clark.

  9. The true names and
    capacities of Defendants named herein as DOES I through X, inclusive, whether
    individual, corporate, associate or otherwise, are presently unknown to
    Plaintiff, who therefore sues said Defendants by such fictitious names; and
    when the true names and capacities of DOES I through X, inclusive, are
    discovered, Plaintiff will ask leave to amend this Complaint to substitute the
    true names of said Defendants.  Plaintiff
    is informed, believes and therefore alleges that Defendants so designated
    herein are responsible in some manner for the events and occurrences contained
    in this action.

GENERAL ALLEGATIONS


  1. On or slightly after April 10, 2012, Valdez and Hundley
    met J. Michael as Seller of certain real property and Secretary/Treasurer for SNI.

  2. SNI was selling the Tonopah Apartments, and J. Michael represented
    to the Plaintiffs that the title was free and clear of any liens or
    encumbrances.

  3. The address of the Tonopah apartment complex is 937
    Main Street, Tonopah, Nevada  89049
    (hereinafter the “Property”).

  4. Because the Tonopah apartment complex has buildings located
    in both Nye County and Esmeralda County, the two Parcel Numbers of the Property
    are as follows:

Nye County:  08-021-02

Esmeralda County:  06-531-10

 


  1. The legal description of the Property is as follows:

The land
referred to herein is situated in the State of Nevada, County of NYE, Town of
TONOPAH described as follows:

 

Surface rights
only to a depth of 500 feet in and to that certain parcel of land in the County
of Nye and the County of Esmeralda in the State of Nevada in Section 34,
Township 3 North, Range 42 East, M.D.B.&M., and being more particularly
described as follows:

 

That portion of
the Deming, Cashboy, C.B.Q., Ferris Baby, Denver and Paymaster Patented Lode
Mining Claims in Section 34, Township 3 North, Range 42 East, according to the
Official Plat of said land on file in the Bureau of Land Management, described
as follows:

 

The land
commonly known as Parcel 2 of that certain Lot Line Adjustment Map filed in the
Office of the County Recorder of Nye County, Nevada on May 12, 1983 as File No.
80209, Nye County, Nevada records more particularly described as follows:

 

COMMENCING at
the West Quarter (W1/4) corner of Section 35, of said Township and Range.  Thence North 4607’46” West,
1056.67 feet to a point; Thence North 6536’00” West, 1098.83 feet
to the TRUE POINT OF BEGINNING, also being the Southeasterly corner of Parcel 2
as shown on that certain lot line adjustment map recorded May 12, 1983 in the
Office of the Nye County Recorder under File No. 80209, Nye County, Nevada
records; thence North 2424’00” East along the Easterly line of
Parcels 1 and 2 of the above mentioned lot line adjustment map 406.00 feet to a
point; thence North 6536’00” West, 401.35 feet to a point on the
Westerly line of Parcel 1 of the above mentioned lot line adjustment map;
thence South 2424’10” West, 406.00 feet to the Southwesterly corner
of said Parcel 2; thence South 6536’00” East, 401.35 feet to the
TRUE POINT OF BEGINNING.

 

EXCEPTING THEREFROM that portion
of said land described as follows:

 

            COMMENCING at the West Quarter
(W1/4) corner of Section 35, of said Township and Range, Thence North 4607’46”
West, 1056.67 feet to a point, thence North 6536’00” West, 1098.83
feet to a point; thence North 2424’00” East, 326.00 feet to the
TRUE POINT OF BEGINNING; thence North 2424’00” East, 80.00 feet to
a point, thence North 6536’00” West, 401.35 feet to a point; thence
South 2424’10” West, 80.00 feet to a point; thence South 6536’00”
East, 401.35 feet; to the TRUE POINT OF BEGINNING, a portion of Parcel 1 as
shown on Lot Line Adjustment Map filed in the Office of the County Recorder of
Nye County, Nevada on May 12, 1983 as File No. 80209.

 

            ALSO EXCEPTING THEREFROM, any veins,
or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead,
tin, copper, or other valuable deposits within the land above described, which
may have been discovered or known to exist on or prior to the recording of the
Location Notices of those certain Lode Mining Claims herein described.

 


  1. On or about May 2012, J. Michael told Valdez that he (J.
    Michael) was an attorney, and that he (J. Michael) could represent Plaintiffs Valdez
    and Tonopah Asset Management, as their attorney in purchasing the Property to reduce
    the closing costs and fees for both the sellers and the buyers.

  2. J. Michael showed Plaintiffs a title report for the subject
    Property purportedly issued by and from Cow County Title, and stated that he
    would utilize the Cow County title report  to close escrow  out of J. Michael’s law office.

  3. J. Michael represented to Plaintiffs that the title
    report was allegedly clean and clear of any liens and/or  encumbrances on the Property.

  4. J. Michael led Plaintiffs to believe that Cow County
    Title would insure title to the Property and issue a policy of title insurance.

  5. Plaintiffs agreed to pay an $88,000 down payment, with
    the balance to be paid over 7 years, with an unsecured promissory note (the
    “Note”), to purchase the Property from Defendants, subject to offsets for
    improvements made to the Property.

  6. SNI represented that the Note would be unsecured so
    that Plaintiffs could obtain a rehab loan to refurbish and renovate the
    Property.

  7. Three days after closing, SNI and J. Michael made Valdez
    and Hundley aware of various liens against the Property, including mechanics
    liens and judgment liens.

  8. The title to the Property was clouded by a Desert
    Boilers Mechanics Lien and by a Judgment held by Robert Lauren.

  9. In addition to the liens, the physical condition of the
    Property was much worse than had been represented by Defendants to
    Plaintiffs. 

  10. SNI  did not tell
    or disclose to the buyers the following defects in the Property, including, but
    not limited to, the following defects:

    1. $150,000 to repair the Water and Sewer Systems;

    2. $150,000 to repair the Electrical Systems;

    3. $378,000 to repair the Drywall, Paint, and Finishes;
      and

    4. $72,000 in General Contracting Costs.

    5. SNI and J. Michael did not forward to Plaintiffs the
      security deposits held in the sellers’ trust account received from the tenants
      that were in the building totaling at least $13,535.

    6. J. Michael stated that the manager had the security
      deposits held at the Property, and that Plaintiffs would be provided those monies
      in cash that the manager kept in a safe on the 
      Property.

    7. The Property manager stated that he sent the security deposits
      to J. Michael and SNI each time a deposit was taken from a tenant.

    8. SNI admitted and promised that the security deposits
      would be forwarded to Plaintiffs.

    9. After several requests from Plaintiffs, SNI stated that
      it no longer held the security deposits, and would credit Plaintiffs the
      security deposits or take the Property back. 

    10. There was no Nevada Real Estate disclosure form in the
      sale of the Property to Plaintiffs.

    11. Defendants have never provided Plaintiffs with a copy
      of the Purchase Agreement or other documents related to the purchase and sale
      of the Property.

First Attempt.


  1. There was no Truth in Lending disclosure generated at
    the time of closing, disclosing to the buyers (Plaintiffs herein) the rate,
    charges, and other terms of the Note.

  2. Plaintiffs were given the false representation that J.
    Michael  was representing the Plaintiffs’
    best legal interests at closing via an attorney-client relationship.

  3. J. Michael held the eventual closing at the Rio Buffet
    in Las Vegas, Nevada, rather than at his law office as Plaintiffs originally
    anticipated and agreed.

  4. J. Michael did not disclose to Plaintiffs that he had
    been disbarred by the Nevada State Bar and the Nevada Supreme Court.

  5. Borrower never received an executed copy of the
    purchase agreement or the Note after closing as promised by SNI and J. Michael.

  6. After the closing, J. Michael promised to provide Plaintiffs
    with copies of the purchase and sale documents, deed, title insurance policy,
    etc., when he returned to his law office.

  7. Plaintiffs later discovered that SNI and J. Michael did
    not record the transaction at closing as stated in the agreement, and did not
    convey title to the Property to Plaintiffs, free and clear of any encumbrances,
    and J. Michael never provided any copies of the purchase and sale documents to
    Plaintiffs as promised.

  8. SNI and J. Michael were in breach of the purchase
    agreement from the date of closing and transfer of possession on June 1, 2012.

  9. SNI and J. Michael misrepresented to Plaintiffs many of
    the material facts relative to the purchase and sale of the Property, including
    a clouded title, no recording of a deed at closing, and failure to provide Plaintiffs
    with an executed copy of the various agreements.  Moreover, J. Michael represented to Valdez that
    J. Michael was the buyer’s attorney for the closing, but he in fact had been
    disbarred, and never disclosed the blatant conflict of interest, nor received
    (or requested) any waiver, and never explained the ramifications of his
    conflict to Plaintiffs.

  10. Plaintiffs discovered liens and encumbrances on the
    Property and complained to J. Michael about the poor physical condition of the
    Property, and excessive repairs would be need to make the Property habitable.

  11. Within a week or two after the close of escrow, SNI
    started threatening Plaintiffs that SNI, through J. Michael, [threatening to
    foreclose on the Property] if Plaintiffs did not accept the various liens recorded
    against the  Property.   This was one of the first threats by
    Defendants to take the Property back from Plaintiffs by foreclosure.

Second Attempt.


  1. This second attempt to foreclose on the Property by J.
    Michael is a pattern that existed during the entire course of Plaintiffs’ relationship
    and negotiations with Plaintiffs and J. Michael.

  2. Defendants breached the implied covenant of good faith and
    fair dealings owed to Plaintiffs multiple times during the purchase and sale of
    the Property to Plaintiffs, but not limited to:

    1. Not disclosing mechanics liens and judgment liens on
      title;

    2. Not disclosing that J. Michael was a disbarred attorney
      to Valdez;

    3. Not disclosing the pending litigation against the
      Tonopah Apartments in Nye County, 5th Judicial District Court, Tonopah, Nevada;

    4. Not disclosing the terrible physical condition of units
      of alleged tenants that were not home during the inspection period;

    5. Not disclosing the number of non-performing units
      located at the subject property, of which Vern as the Property manager was
      aware;

    6. Not sending SNI Tonopah Apartment’s rent role monthly;

    7. Not turning over the $13,535.00 held in trust for the
      security deposits of tenants at the Tonopah Apartments as agreed at time of
      transfer;

    8. By threatening foreclosure against Plaintiffs; and

    9. By failing to convey the Property to Buyers by a recorded
      Grant Bargain Sale Deed.

 


  1. Plaintiffs requested that SNI must pay off the liens,
    and deliver clean and clear title to Plaintiffs.

  2. Plaintiffs started the rehab, renovation and
    improvement of the Property.

  3. Because Defendants had not conveyed the Property to
    Plaintiffs, and no deed had been recorded, Plaintiffs were forced to work with
    a hard money lender that issued onerous loan terms to the Plaintiffs on the Property.

  4. Plaintiffs’ renovation plan was to include $750,000
    worth of improvements to the Property.

  5. Defendants agreed Plaintiffs could have a credit against
    the original purchase price for the sums spent that were necessary to refurbish
    the Property.

  6. Plaintiffs continued to pay SNI $8,000 per month on the
    unsecured Promissory Note.

  7. SNI threatened to foreclose on Plaintiffs if Plaintiffs
    negotiated with the Judgment Creditor or with the Mechanics Lien holders encumbering
    the Property.

Third Attempt.


  1. Soon after, SNI, via J. Michael, admitted to Plaintiffs
    that yet another lawsuit is pending against and encumbering the Property, filed
    by Juanita Harness in Nye County.

  2. Plaintiffs wanted to participate in the defense of the
    suit as this was another $100,000 lawsuit clouding the title to the Property.

  3. On or about September 1, 2012 during the compromise negotiations,
    J. Michael admitted that he was a disbarred attorney and not able to practice
    law in Nevada.

  4. J. Michael admitted these facts after Plaintiffs received
    a collection letter from the Mechanics Lien holder Desert Boilers, and the
    Property was being threatened with a foreclosure suit if Plaintiffs did not pay
    Desert Boilers on its lien.

Fourth Attempt.


  1. Plaintiff Tonopah Asset Management contacted the
    Mechanics Lien Holder Desert Boilers, and attempted to make payment
    arrangements with the Judgment Creditor.

  2. Desert Boilers agreed to accept a $60,000 payoff, and
    stated that J. Michael was not to contact Desert Boilers nor was anyone else
    but a licensed attorney for SNI.

  3. Defendant SNI immediately threatened Tonopah Asset
    Management with foreclosure of the Property if it engaged in settlement
    discussions with Desert Boilers.

  4. J. Michael stated that he was going to take Desert
    Boilers to court, and act Pro Se or Pro Per in the matter, and that Plaintiffs
    were not to be involved in the matter.

Fifth Attempt.


  1. SNI initiated a lawsuit against Desert Boilers via J.
    Michael representing SNI in the Justice Court of Esmeralda County in Goldfield,
    Nevada, alleging that he had not consented to the improvements and repairs made
    to the boilers in the Property.

  2. The case involving Desert Boilers was eventually dismissed
    with prejudice as being meritless and frivolous, and SNI and J. Michael were
    ordered not to refile and to pay a $5,000 sanction to the Court for frivolous
    filing.

  3. SNI then informed Plaintiffs that the monthly payment to
    SNI under the Note had to increase due to SNI feeling that there was more risk
    in the transaction. 

  4. Monthly payments under the Note were then arbitrarily increased
    by Defendants to $8,500 per month, then to $9,000 per month under the unsecured

    Note for the Property.

  5. SNI via J. Michael stated that if Plaintiffs did not
    like the increased monthly payments, SNI would foreclose on the Property and
    take it back.

Sixth Attempt.


  1. Compromise negotiations continued between SNI and
    Tonopah Asset Management, and in September of 2013, Valdez, on behalf of
    Tonopah Asset Management, met with J. Michael Schaefer to attempt to reach a
    global settlement of all disputes regarding the Note and the Property.

  2. As a result of the Settlement Agreement reached, a
    Grant, Bargain, Sale Deed was executed by Defendants and recorded, which
    conveyed the subject Property to Plaintiffs. 
    The Deed was signed on September 2013 and recorded by SNI on October 16,
    2013 in Nye County as Document No. 808146; and recorded in Esmeralda County on October
    18, 2013 as Document No. 190021 (the “Deed”), conveying the Property to
    Plaintiffs.

  3. In return for and in consideration of the Deed,
    Plaintiffs agreed to pay Defendants the sum of $149,000 as a full and final
    payment for the Property.

  4. Tonopah was eventually approved by Kennedy Funding for
    a renovation loan in  the amount of approximately
    $3,200,000, and was negotiating with SNI for the improvements to the Property to
    be credited against the unsecured Note in the original amount of approximately
    $690,000 as renovation credits as previously agreed, along with a subordination
    of any remaining financing to the new hard money note lender.

  5. Tonopah Asset Management was also requesting that Defendants
    clear the title to the Property of all the liens against the Property, even if SNI
    had to pay the liens and judgments in full.

  6. SNI refused to take any steps to clear title to the
    Property.

  7. SNI stated that if Plaintiffs did not like the fact
    that SNI would not subordinate or credit the improvements made to the Property
    on the Promissory Note, then SNI would foreclose upon the Property.  As a result, Plaintiffs lost the letter of
    commitment from Kennedy Funding.

Seventh Attempt.


  1. The compromise negotiations over these disputes continued
    for months over how   Plaintiffs would be
    allowed by Defendants to finance the improvements to the Property.

  2. The lawsuit (Schaefer vs. Hundley), filed by Defendants
    in Nye County finally came into Court. 

  3. The Judge dismissed the case as a frivolous suit and
    stated that J. Michael could not represent others in court as a disbarred
    attorney.

  4. SNI stated that it would negotiate with Plaintiffs for a
    resolution of their dispute after J. Michael’s unsuccessful run for a political
    office in California and Nevada.

  5. On or about April 13, 2014, the Las Vegas Review
    Journal printed in its newspaper an article summarizing some of J. Michael’s bad
    deeds, and the cases that disbarred him from the practice of law in Nevada, and
    the facts that disqualified him from running for political office in Nevada.

  6. Payments continued to be made by Plaintiffs to

    Defendants on the accord and satisfaction agreement from September 1, 2013 at
    $8,500 per month, totaling $34,000.

  7. Payments were later increased from January 1, 2014 onward
    at $9,000 per month, totaling $108,000.

  8. SNI had already received an $88,000 down payment, with
    the total amount of $230,000 being paid, (together with $690,000 in renovation
    credits), for a total sales price for the Property of approximately $980,000.

  9. In consideration of this settlement amount, Tonopah Asset
    Management was to receive clean and clear title to the Property and own fee
    simple absolute title to the Property per the recorded Grant, Bargain, Sale
    Deed.

  10. On December 25, 2014 (Christmas Day), SNI contacted Tonopah
    Asset Management and demanded an
    extra payment of $5,000.

  11. SNI and J. Michael again threatened to foreclose the
    Property on some type of lien or mortgage, even though the Grant, Bargain, Sale
    Deed had already been recorded, and Plaintiffs are unaware of any mortgage
    encumbering the Proprty.

  12. Defendants claimed they had the right to foreclose if more
    monies were not forthcoming from the Plaintiffs.

  13. J. Michael demanded that the Plaintiffs deed the
    Property back to J. Michael or he would sue Plaintiffs for everything they
    owned and foreclose.

  14. SNI stated that it  had recorded some type of a mortgage against
    the Property in Esmeralda County.

  15. Plaintiffs have never knowingly signed or consented to
    a mortgage or deed of trust on the Property held by Defendants.

  16. Defendants were not allowed to record a mortgage or
    deed of trust after the Grant, Bargain, Sale Deed was recorded.

  17. Any such mortgage or deed of trust filed or recorded by
    Defendants was a fraud and a forgery and would be null and void as an
    undisclosed lien created when Plaintiffs erroneously believed J. Michael was
    their attorney protecting their interests in the transaction.

  18. Any purported mortgage or deed of trust, if indeed one
    existed, was invalidated and extinguished by the Deed that was recorded on October
    16, 2013 in Nye County, Nevada, and on October 18, 2013 in Esmeralda County,
    Nevada, and paid for as agreed by the parties in the global settlement
    negotiations which culminated in the recording of the Grant, Bargain, Sale
    Deed.

  19. Thereafter, Defendants started contacting real estate
    investors, title companies, public utilities, and tenants, erroneously
    asserting various defamatory and slanderous comments about the Property and
    about the Plaintiffs, including that Plaintiffs were in default and not paying
    their utility bills and had defaulted on their mortgage payments.

  20. Defendants’ continuous harassment and threats to
    Plaintiffs continued for months, until finally J. Michael filed a lawsuit on
    behalf of his sons in Nye County, in proper person, which suit was dismissed, since
    J. Michael is a disbarred attorney and cannot represent others whether by power
    of attorney or by assignment.

  21. Not only was the complaint frivolous, but the documents
    attached thereto appear to be bogus and/or forged and/or signed under illegal
    duress and misrepresentations.

  22. Due to the wrongful and illegal demands of J. Michael
    and the other Defendants, Plaintiffs lost their favorable construction loan
    commitments.

  23. The court promptly and properly dismissed the Complaint
    on April 2, 2015.  A Notice of Entry of
    said Order was mailed to all parties on April 27, 2015.

FIRST CAUSE OF ACTION

(Breach of Contract)


  1. Plaintiffs repeat and reallege each and every
    allegation stated above and incorporate such as if fully set forth herein.

  2. Plaintiffs and J. Michael entered into various
    agreements, including, without limitation, a settlement agreement in September
    2013, an agreement for real property brokerage/legal services, and an agreement
    for th4e sale and financing of real property.

  3. J. Michael breached the terms of said agreements, all
    as set forth herein.

  4. It has been necessary for Plaintiffs to retain the
    services of an attorney to prosecute this action, and Defendants should be
    required to pay reasonable attorneys’ fees as well as costs incurred in accordance
    with the law, including, without limitation, as special damages.

SECOND CAUSE OF ACTION

(Declaratory Judgment/Quiet
Title)


  1. Plaintiffs repeat and reallege each and every
    allegation stated above and incorporate such as if fully set forth herein.

  2. The Property should be restored and quieted to
    Plaintiffs, and all of the claims of Defendants should be denied.

  3. This Court should declare and decree and enter an Order
    of Declaratory Relief that the Plaintiffs are the rightful owners of the
    Property, free and clear of any mortgage, deed of trust or other lien in favor of
    Defendants, or any of them, and quiet title in the name of Plaintiffs.

  4. It has been necessary for Plaintiffs to retain the
    services of an attorney to prosecute this action, and Defendants should be
    required to pay reasonable attorneys’ fees as well as costs incurred in
    accordance with the law, including, without limitation, as special damages.

THIRD CAUSE OF ACTION

(Unjust Enrichment)


  1. Plaintiffs repeat and reallege each and
    every allegation stated above and incorporates such as if fully set forth
    herein.

  2. Defendants have been unjustly enriched by, including
    without limitation, selling the Property Plaintiffs with substantial
    undisclosed material defects, title encumbrances, and other problems, and by
    unilaterally raising the monthly payment amounts due on the unsecured
    promissory note  retaining the rents from
    the Property.

  3. The principles of justice, equity and good conscience
    require that the monies paid to Defendants for these increased, unanticipated
    and undisclosed excuses be disgorged to Plaintiffs.

  4. Because of the foregoing matters, Plaintiffs have been
    damaged in an amount exceeding $10,000.00, and are entitled to an award for
    their damages incurred herein.

  5. It has been necessary for Plaintiffs to retain the
    services of an attorney to prosecute this action, and Defendants should be
    required to pay reasonable attorneys’ fees as well as costs incurred in
    accordance with the law, including, without limitation, as special damages.

FOURTH CAUSE OF ACTION

(Fraud (Embezzlement))


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants’ actions were intentionally deceptive.  They made countless misrepresentations to
    Plaintiffs during the relevant time period, including intentional monthly
    miscalculations of company or others’ funds, and regarding the condition of the
    Property.

  3. Defendants intentionally concealed their embezzlement
    of Plaintiffs’ and others’ monies held in Defendants’ Trust Account, and their
    acts were only recently discovered.

  4. Plaintiffs have been damaged in an amount equal to the
    value of the funds that Defendants embezzled, together with all amounts
    expended by Plaintiffs in seeking return of those monies, in an amount to be
    proven at the time of trial, and are entitled to a judgment award in excess of
    $10,000.00 against Defendants from this Court.

  5. In wrongfully embezzling Plaintiffs’ funds, Defendants
    have acted in a willful, malicious, fraudulent, and/or oppressive manner, and
    in wanton disregard of Plaintiffs’ rights, the rights of others, and the
    interests of the public. 

  6. On information and belief, Plaintiffs assert that
    Defendants created an illegal,  bogus an
    fraudulent lien on the Property.

  7. As a result thereof, Plaintiffs hereby seek exemplary
    and punitive damages in an amount to be proven at the time of trial.

  8. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

FIFTH CAUSE OF ACTION

(Civil Conspiracy)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants acted in concert with each other, with an
    object to defraud Plaintiffs.

  3. Defendants intentionally or willfully joined with each
    other, and mutually agreed to act together, with the goal of defrauding the
    Plaintiffs.

  4. Defendants actively participated together in obtaining
    possession of money by means of false pretenses.

  5. As a direct and proximate result of the Defendants’
    unlawful and wrongful acts, Plaintiffs have been damaged and are entitled to an
    award and judgment in a sum in excess of Ten Thousand Dollars ($10,000.00),
    plus interest thereon, in an amount to be determined at trial.

  6. Defendants have acted in a willful, malicious,
    fraudulent, and/or oppressive manner, and in wanton disregard of Plaintiffs’
    rights, the rights of others, and the interests of the public.  As a result thereof, Plaintiffs hereby seek
    exemplary and punitive damages in an amount to be proven at the time of trial.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

SIXTH CAUSE OF ACTION

(Conversion)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants came to exercise unauthorized dominion and
    control over Plaintiffs’ funds and assets, as well as assets obtained as a
    result of the improper use of Plaintiffs resources, including but not limited
    to the property enumerated above.

  3. Defendants’ dominion and control over the Property and
    money of Plaintiffs has been to the exclusion of, and in defiance of the
    Plaintiffs’ rights, or has otherwise interfered with the rights of Plaintiffs
    in and to such property and money.

  4. Plaintiffs have been damaged by Defendants’ conversion
    of Plaintiffs’ property and money in an amount to be determined at tria1.

  5. As a direct and proximate result of the Defendants’
    unlawful and wrongful acts, Plaintiffs have been damaged and are entitled to an
    award and judgment in a sum in excess of Ten Thousand Dollars ($10,000.00),
    plus interest thereon, in an amount to be determined at trial.

  6. Defendants have acted in a willful, malicious,
    fraudulent, and/or oppressive manner, and in wanton disregard of Plaintiffs’
    rights, the rights of others, and the interests of the public.  As a result thereof, Plaintiffs hereby seek
    exemplary and punitive damages in an amount to be proven at the time of trial.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages incurred
    herein.

SEVENTH 
CAUSE OF ACTION

(Breach of Fiduciary Duties)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants, including J. Michael, held themselves out
    as real estate experts, brokers  and/or
    lawyers who were trained and experienced to render specialized brokerage/legal
    and/or  trust service in real estate
    transactions.

  3. As real estate experts and/or brokers, and/or purported
    lawyers, Defendants stand in a fiduciary relationship with Plaintiffs and have
    a duty to Plaintiffs and to the public at large to act at all times, honestly
    and in good faith with a view to the best interests of the Plaintiffs and to
    exercise the care, diligence, and skill that a reasonably prudent person would
    exercise in comparable circumstances.

  4. Defendants failed to fulfill their obligations to
    Plaintiffs, failed to faithfully execute their required services, and breached
    their duties to Plaintiffs and the public in various ways.

  5. As a direct and proximate result of Defendants’
    breaches of their fiduciary duties, the Plaintiffs have been damaged in a sum
    in excess of Ten Thousand Dollars ($10,000.00), plus interest thereon, in an
    amount to be determined at trial, and are entitled to a judgment against
    Defendants awarding the amount of said damages to Plaintiffs.

  6. Because of the willful, wanton, and intentional nature
    of Defendants’ conduct, and their abuse of their position of trust, and
    inasmuch as Defendants’ actions were malicious, fraudulent, and/or oppressive,
    Defendants are also liable for punitive damages, in an amount to be determined
    at trial.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

EIGHTH CAUSE OF ACTION

(Tortious Breach of Covenant of Good Faith and
Fair Dealing)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. All contracts in Nevada contain an implied covenant of
    good faith and fair dealing, and where such contracts involve fiduciary duties
    and implicate public interests and the public trust, breach of said implied
    warranty is actionable as tortious.

  3. Defendants have failed and refused, and continue to
    fail and refuse, to deal in good faith with Plaintiffs and have, therefore,
    tortiously breached the covenant of good faith and fair dealing.

  4. As a direct and proximate result of Defendants’ breach
    of the duty of good faith and fair dealing, Plaintiffs have been damaged in a
    sum in excess of Ten Thousand Dollars ($10,000.00), plus interest thereon, in
    an amount to be determined at trial, and are entitled to a judgment against
    Defendants awarding the amount of said damages to Plaintiffs.

NINTH CAUSE OF ACTION

(Fraudulent Inducement/Misrepresentation)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. That Defendants made representations of fact to
    Plaintiffs, including without limitation, with respect to the monies being held
    in trust by Defendants relating to various residential leases, and with respect
    to undisclosed material defects in and title probl4ems and/or encumbrances
    existing against the Property.

  3. Such representations by the Defendants were false
    and/or omitted material information.

  4. It was known by Defendants that their representations
    were false and/or omitted material information.

  5. Defendants’ representations or omissions were such as a
    person of ordinary prudence would rely upon.

  6. Plaintiffs were deceived by the Defendants’
    misrepresentations and reasonably and foreseeably relied thereon.

  7. As a direct and proximate result of Defendants’
    misrepresentations and omissions, Plaintiffs have been damaged in a sum in
    excess of Ten Thousand Dollars ($10,000.00), plus interest thereon, in an
    amount to be determined at trial, and are entitled to a judgment against
    Defendants for all of said losses.

 

TENTH CAUSE OF ACTION

(Fraudulent Concealment)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants, as sellers and/or as a broker and/or lawyer
    for residential properties, had a duty to disclose material facts regarding the
    Property, to hold deposits and commissions arising out of or related to said
    residences in trust, and other duties which they breached.

  3. As a direct and proximate result of the Defendants’
    fraudulent omissions and concealments of such fraudulent accounting activity,
    Plaintiffs have been damaged in a sum in excess of Ten Thousand Dollars
    ($10,000.00), plus interest thereon, in an amount to be determined at trial.

  4. Because of the willful, wanton, and intentional nature
    of Defendants’ conduct, and their abuse of their position of trust, and
    inasmuch as Defendants’ actions were malicious, fraudulent, and/or oppressive,
    Defendants are also liable for punitive damages, in an amount to be determined
    at trial.

  5. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

ELEVENTH CAUSE OF ACTION

(Unjust Enrichment)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. As set forth in more detail above, Defendants have been
    unjustly enriched in various ways, including Defendants’ realized monetary
    gains from Plaintiffs due to their embezzling the monies that rightfully
    belonged to Plaintiffs or others.

  3. Defendants have been unjustly enriched to the detriment
    of Plaintiffs, which have been significantly damaged.

  4. As a direct and proximate result of Defendants’ Breach
    of Contract, Plaintiffs have been damaged in a sum in excess of Ten Thousand
    Dollars ($10,000.00), plus interest thereon, in an amount to be determined at
    trial, and Plaintiffs are entitled to a judgment from this Court and against
    Defendants awarding in excess of $10,000.00 to Plaintiffs from Defendants.

  5. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

TWELFTH CAUSE OF ACTION

(Negligent Falsehood)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants’ representations to Plaintiffs regarding,
    such matters as, without limitation, clean title to the Property, the physical
    condition thereof, and the monies held in trust for each residential property
    were false, and they knew they were false.

  3. Defendants made representations and failed to disclose
    information knowing that Plaintiffs would rely on their misrepresentations and
    concealments and that it was absolutely vital that Plaintiffs’ knowledge and
    understanding of the information provided by Defendants be true, complete, and
    accurate.

  4. Each of the representations was made for the purpose of
    inducing the Plaintiffs to rely upon them and to do business with Defendants.

  5. Plaintiffs did in fact rely upon them, in ignorance of
    the representations’ falsity, and the Plaintiffs have been and continue to be
    damaged as a result of the belated discovery of the true facts regarding said matters.

  6. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

THIRTEENTH CAUSE OF ACTION

(Accounting)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Defendants owed Plaintiffs strict fiduciary duties
    under the broker agreement and applicable laws, and per the attorney-client
    privilege they thought existed, Defendants were required to act honestly with
    full disclosure and in good faith with a view to the best interests of
    Plaintiffs, and to exercise the care, diligence and skill that a reasonably
    prudent person would exercise in comparable circumstances.

  3. Defendants breached their fiduciary and other duties to
    Plaintiffs, and failed to faithfully execute service, in various ways, and
    profited from their breach of duty through the receipt of unauthorized and
    undisclosed amounts of money.

  4. Defendants commingled the funds they received in breach
    of their fiduciary duties, and the proceeds obtained on their use of those
    funds, with their own funds.

  5. As a fiduciary, Defendants must account to their
    principal, Plaintiffs, for any and all funds they received during the course of
    their relationship with Plaintiffs.

  6. Defendants must therefore render an account to
    Plaintiffs for the funds that they received during the course of their
    employment, including an accounting for the interest on the funds they obtained
    and benefits they obtained as a result of wrongful use of Plaintiffs funds.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

FOURTEENTH CAUSE OF ACTION

(Declaratory Relief)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. There is presently a dispute between Plaintiffs and the
    Defendants regarding Defendants’ obligations to provide a fair and full
    restitution to Plaintiffs for the embezzled monies belonging to Plaintiffs, and
    regarding the full extent and the amount of all moneys which have been wrongfully
    embezzled by Defendants.

  3. On information and belief, Defendants continue to hold
    funds and/or property that belong to Plaintiffs, and Defendants have failed and
    refused to return the funds.

  4. Plaintiffs are entitled to the immediate payment of all
    amounts and property stolen by Defendants or that are in the possession of
    Defendants.

  5. To the extent that the Defendants dispute this
    contention, Plaintiffs seek a judicial determination of the Defendants’ rights,
    obligations, and responsibilities to Plaintiffs regarding the embezzled funds.

  6. In particular, Plaintiffs seek a judicial determination
    that it is the rightful owner of such funds and that it is entitled to
    immediate payment of all amounts stolen by or that benefitted the Defendants,
    and that all assets of Defendants must be attached and/or frozen until this
    restitution is made, and that any funds remaining in the Trust Account be
    immediately turned over to Plaintiffs.

  7. The Court is authorized to grant such declaratory
    relief pursuant to Chapter 30 of the Nevada Revised Statutes.

FIFTEENTH CAUSE OF ACTION

(Trade Libel/Defamation)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. As alleged in detail in the preceding paragraphs, Defendants
    made a series of false and misleading statements or omissions about Plaintiffs,
    including false and misleading statements about Plaintiffs’ goods and its
    business.

  3. Those statements were false and defamatory.

  4. Defendants knew at the time the statements were made
    that the statements were false and defamatory.

  5. Defendants made the statements with reckless disregard
    for their truth.

  6. Defendants’ wide publication of the false and
    defamatory statements was unprivileged.

  7. Defendants made the false and defamatory statements
    intentionally, with an evil mind and the intent to cause injury, and/or with
    reckless disregard of the substantial risks that their conduct might
    significantly injure Plaintiffs.

  8. Plaintiffs suffered damages as a result of Defendants’
    false and defamatory statements.

  9. In engaging in the foregoing conduct, Defendants acted
    with malice, fraud and oppression, and with a conscious and wanton disregard
    for Plaintiffs’ rights and interests. 
    Plaintiffs are therefore entitled to an award of punitive and exemplary
    damages against Defendants.

  10. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

SIXTEENTH CAUSE OF ACTION

(Abuse of Process)


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. Schaefer did not file the lawsuit against Plaintiffs
    for the purpose of resolving a legal dispute or to otherwise legitimately use
    the legal process.

  3. Instead, Schaefer filed the lawsuit for the primary and
    intended purpose of damaging Plaintiffs’ business and goodwill, and attempting
    to take control of the Tonopah apartment complex.

  4. Schaefer’s filing of the lawsuit without any intent to
    use its filing for any legitimate purpose, is a willful act in the use of the
    legal process not proper in the regular conduct of a legal proceeding.

  5. Plaintiffs suffered damages as a result of Schaefer’s
    misuse of the legal process.

  6. In engaging in the foregoing conduct, Schaefer acted
    with malice, fraud and oppression, and with a conscious and wanton disregard
    for Plaintiffs’ rights and interest. Plaintiffs are therefore entitled to an
    award of punitive and exemplary damages against Schaefer.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

SEVENTEENTH CAUSE OF ACTION

(Deceptive Trade Practices


  1. Plaintiffs repeat, reallege and incorporate by this
    reference each and every allegation contained above, inclusive, as if fully set
    forth at length herein.

  2. As alleged in detail in the preceding paragraphs,
    Defendants knowingly made false representations about the characteristics,
    benefits, and quality of the Property for sale by Schaefer.

  3. As alleged in detail in the preceding paragraphs,
    Defendants disparaged Plaintiffs’ services and business by false or misleading
    representation of fact.

  4. As alleged in detail in the preceding paragraphs,
    Defendants violated state and federal statutes relating to the sale of
    services.

  5. Defendants’ false and misleading statements constitute
    deceptive trade practices, and are prima facie evidence of Schaefer’s’ intent
    to injure Plaintiffs, and to destroy or substantially lessen competition.

  6. Plaintiffs suffered damages as a result of Defendants’
    deceptive trade practices.

  7. Plaintiffs have been required to obtain counsel to
    prosecute this action and are entitled to an award as and for their reasonable
    costs and attorneys’ fees incurred herein, both pursuant to any statute, rule,
    or contractual provision allowing for the same, and also as special damages
    incurred herein.

EIGHTEENTH CAUSE OF ACTI9ON

(Injunctive Relief)

            202.     Plaintiffs
repeat, reallege and incorporate by this reference each and every allegation
contained above, inclusive, as if fully set forth at length herein.

            203.     Plaintiffs
will be irreparably harmed if Defendants continue to breach their prior agreements
by threatening wrongful foreclosure, if Defendants continue to wrongly use
confidential information to Plaintiffs’ detriment, and the harm to Plaintiffs
outweighs any harm that could potentially be suffered by Defendants.

            204.     Plaintiffs
are entitled to injunctive relief enjoining the continual breach of the Accord
and Satisfaction Agreement and sales agreement by Defendants continually
threatening to wrongfully foreclose on the Property.

WHEREFORE,
Plaintiffs pray for judgment as follows:


  1. That this Honorable Court
    enter Judgment in favor of Plaintiffs and against the Defendants, and each of
    them, jointly and severally, for damages and pre-judgment interests in an
    amount in excess of $10,000.

  2. That this Honorable Court
    enter Judgment in favor of Plaintiffs and against the Defendants, and each of
    them, jointly and severally, for special consequential and incidental damages,
    including loss of rental income, and expenses incurred as a result of the
    wrongful retention and use of the security deposits, including pre-judgment
    interest for same in an amount in excess of $10,000.

  3. That this Honorable Court
    enter Judgment in favor of Plaintiffs and against the Defendants, and each of
    them, jointly and severally, for restitution for property damage, fraud and
    misrepresentation of the original condition of the Property in an amount in
    excess of $10,000.

  4. That this Honorable Court
    enter Judgment in favor of Plaintiffs and against the Defendants, and each of
    them, jointly and severally, for attorneys’ fees and costs incurred in an
    amount to be determined at the time of trial.

  5. That this Honorable Court
    enter Judgment in favor of Plaintiffs and against the Defendants, and each of
    them, jointly and severally, for exemplary and punitive damages in an amount to
    be determined at trial.

  6. That this Honorable Court
    enter Judgment quieting title to the Property in favor of Plaintiffs and
    against all Defendants, thereby declaring that title to the Property is
    properly and solely vested in the name of Plaintiff, Tonopah Asset Management,
    Inc.

  7. That the Honorable Court enter
    Judgment declaring that any purported liens or mortgages held by Defendants are
    null and void.

  8. That this Honorable Court
    declare the amount of improvement credits to be offset against the purchase
    price, and determine any amounts due nd owing by Defendants to Plaintiff for
    overpayment.

  9. For such other and further
    relief as this Court may deem proper in the premises.

DATED this _____ day of May, 2015.

 

ALBRIGHT,
STODDARD, WARNICK & ALBRIGHT

 

 

 

___________________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 S. Rancho Drive, Suite D-4

Las Vegas, Nevada  89106

(702) 384-7111

Attorneys for Plaintiffs

 

 

Complaint Filed Against Pacquiao for Concealment of Shoulder Injury

  
  
  
maxresdefault

G. Mark Albright

William H. Stoddard, Jr.

ALBRIGHT,
  STODDARD, WARNICK & ALBRIGHT

  801 S. Rancho Drive, Suite D-4

Las
  Vegas, NV  89106

Telephone:  (702) 384-7111

Facsimile:  (702) 384-0605

Email: gma@albrightstoddard.com

            bstoddard@albrightstoddard.com

 

 

Laurence
  D. King (applying for admission pro hac
  vice
)

Linda
  M. Fong (applying for admission pro hac
  vice
)

Mario
  M. Choi  (applying for admission pro hac vice)

KAPLAN
  FOX & KILSHEIMER LLP

350
  Sansome Street, Suite 400

San
  Francisco, CA 94104

Telephone:  415-772-4700

Facsimile:   415-772-4707

Email:  lking@kaplanfox.com

            lfong@kaplanfox.com

            mchoi@kaplanfox.com

(Pro
  hac vice pending)

 

 

Frederic
  S. Fox (applying for admission pro hac
  vice
)

KAPLAN
  FOX & KILSHEIMER LLP

850
  Third Avenue

New
  York, NY  10022

Telephone:
  (212) 687-1980

Facsimile:   (212) 687-7714

Email:  ffox@kaplanfox.com

(Pro
  hac vice pending)

 

Attorneys
  for Plaintiff JOHN ASSALIAN

 

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

 

JOHN ASSALIAN, individually and on behalf of all others similarly situated,

Plaintiff,

v.

TOP RANK, INC., a Nevada corporation;

MAYWEATHER PROMOTIONS,

LLC, a
  Nevada limited liability company;

EMMANUEL
  D. PACQUIAO; and FLOYD MAYWEATHER, JR.,

Defendants.

 

CASE NO.

CLASS ACTION COMPLAINT

 

JURY DEMAND

 



Plaintiff JOHN ASSALIAN (“Plaintiff”), by and through his attorneys,
on behalf of himself and all others similarly situated, brings this Class
Action Complaint against Defendants TOP RANK, INC. (“Top Rank”), a Nevada
corporation, MAYWEATHER PROMOTIONS LLC (“Mayweather Promotions”), a limited
liability company, EMMANUEL D. PACQUIAO, and FLOYD MAYWEATHER, JR., (collectively
“Defendants”) and alleges, based upon personal knowledge as to himself and his
own acts, and as to all other matters upon information and belief, as follows:

  1. I.                  
     NATURE OF THE ACTION

  2. This is a proposed class action on behalf of a
    nationwide class and a California subclass of all similarly situated persons who
    purchased a pay-per-view broadcast of the Floyd Mayweather-Manny Pacquaio fight
    (the “Match”) which took place in Las Vegas, Nevada on May 2, 2015.

  3. Defendant Top Rank, “the country’s premiere boxing
    promotions company” and promoter for Emmanuel
    Dapidran Pacquiao aka “Manny” Pacquiao (“Pacquiao”),
    and Defendant Mayweather Promotions, established in 2007 by 11-time World Champion and currently undefeated
    boxing icon, Floyd “Money” Mayweather (“Mayweather”), promoted the Match as the
    “Fight of the Century.” 

  4. After the Match aired on pay-per-view, the media reported
    that Pacquiao could face disciplinary action from Nevada boxing officials for
    failing to disclose a shoulder injury before his fight with Mayweather.  According to Pacquiao, Mayweather knew about
    Pacquiao’s injury before the Match.    
  5. II.               
    JURISDICTION
    AND VENUE

  6. This Court has jurisdiction over the subject matter of
    this action pursuant to 28 U.S.C. § 1332(d)(2) and the Class Action
    Fairness Act, in that Plaintiff and certain of the defendants in this action
    are citizens of different states and the amount in controversy exceeds
    $5,000,000.00 exclusive of interest and costs.

  7. This court has personal jurisdiction over Defendants Pacquiao
    and Mayweather because they have conducted and do business within this
    District, and Defendants Top Rank and Mayweather Promotions because they are
    headquartered in this District, and all Defendants have sufficient contacts
    with Nevada or otherwise intentionally avail themselves of the laws and markets
    of Nevada, so as to sustain this Court’s jurisdiction over Defendants.

  8. Venue is proper in this judicial district pursuant to
    28 U.S.C. § 1391, because Defendants maintain headquarters in this District
    and/or a substantial part of the events or omissions giving rise to Plaintiff’s
    claims occurred in this judicial district. 
    In addition, Defendants do business and/or transact business in this
    judicial district, and therefore, are subject to personal jurisdiction in this
    judicial district and reside here for venue purposes.
  9. III.            
    PARTIES

  10. At all times relevant to this matter, Plaintiff JOHN
    ASSALIAN (“Plaintiff”) was a citizen of California and resided and continues to
    reside in Alameda, California.  On May 2,
    2015, Plaintiff purchased the Match
    on pay-per-view for $99.95.  Had he known
    that Pacquiao was injured, he would not have purchased the pay-per-view Match.

  11. Defendant Top Rank, a corporation organized and
    existing under the laws of Nevada, has its principal place of business at 748
    Pilot Road, Las Vegas, Nevada.

  12. Defendant Mayweather Promotions, a limited liability
    company organized and existing under the laws of Nevada, has its principal
    place of business at 4616 West Sahara Avenue, Las Vegas, Nevada.

  13. Defendant Emmanuel D. Pacquiao is an individual who is
    a foreign citizen doing business in Nevada, and whose residence is General
    Santos City, South Cotabato, Phillipines.

  14. Defendant Floyd Mayweather, Jr. is an individual and is
    a resident of Nevada.
  15. IV.            
    FACTUAL ALLEGATIONS

  16. On May 2, 2015, a fight was scheduled between Pacquaio
    and Mayweather at the MGM Grand in Las Vegas, Nevada.  Hyped as the “Fight of the Century,” the event
    was a much sought after ticket, and drew hordes of celebrities and boxing
    aficionados.

  17. The Match was heavily promoted by Defendants Top Rank
    and Mayweather Promotions.  For example:

 

HBO & Showtime Pay-Per-View will air the
biggest fight in the world – one that’s expected to break every record in
boxing history – featuring the undefeated Floyd Mayweather &
eight-time, eight-division champ Manny Pacquiao.  The fight to unify the welterweight division
titles, and perhaps more importantly, vie for the right to call themselves the
best fighter of a generation is finally happening.[1]


  1. According to an April 3, 2105 New York Times
    article, the “long-anticipated title fight” between Floyd Mayweather Jr. and Manny Pacquiao on May 2 “will
    cost boxing fans a record price on pay per view: $89.95 to watch in standard
    definition and, in some cases, $99.95 for the high definition version[.]”[2]
     The Match was expected to break all
    boxing pay-per-view records even though the cost of the fight exceeded the
    previous peak — $64.95 for standard definition and $74.95 for high definition —
    for Mayweather’s 2013 fight against Canelo Alvarez.

  2. Top Rank chairman Bob Arum, Pacquiao’s promoter, told
    ESPN.com that “[t]he live gate for the joint Showtime/HBO pay-per-view fight on
    May 2 at the MGM Grand Garden Arena in Las Vegas will generate a staggering $74
    million from the sale of a little more than 15,000 tickets[.]”[3]

  3. Both Pacquaio and Mayweather received massive paychecks
    – reported to be approximately $100 million each – for the Match.  Upon information and belief, Top Rank and
    Mayweather also profited immensely from the Match.

  4. The Match broadcast on pay-per-view was delayed about 30 minutes because of high
    pay-per-view demand causing problems for cable and satellite systems.

  5. Mayweather prevailed in a unanimous decision.  After the Match, it was revealed that Pacquaio
    was suffering from a very significant shoulder injury, making him unable to
    fight to his full ability.  On May 4,
    2015, Los Angeles orthopedic surgeon Dr. Neal ElAttrache told ESPN that
    Pacquaio has a “significant tear” in his rotator cuff that will require surgery
    and require him to be away from the ring for 9-12 months.

  6. When the Nevada State Athletic Commission administered
    the pre-fight examination on Pacquaio on the Friday afternoon before the Match,
    Pacquaio was given a questionnaire.  Among
    the questions was: Have you had any injury to your shoulders, elbows, or hands
    that needed evaluation or examination?  Under
    penalty of perjury, Pacquaio replied no.

  7. To the contrary, one of Pacquaio’s sparring partners
    has allegedly reported that Pacquaio was in fact injured a few weeks prior to
    the fight, and that the injury was so severe that Pacquaio could not continue
    to spar and both boxers were sent home.

  8. As a result of the injury, Pacquaio allegedly requested
    an injection of Toradol (a non-steroidal prescription medication) and the
    numbing drug lidocaine before the Match. 
    That request was rejected by the Nevada State Athletic Commission.

  9. Pacquaio and Top Rank have allegedly admitted that
    Pacquaio was not 100% healthy on the night of the fight, and Pacquaio later
    told the L.A. Times that he re- injured his shoulder in the fourth round of the
    fight.

  10. Pacquaio could face disciplinary action, including fine
    or suspension, as a result of his misrepresentation on the questionnaire.

  11. As one New York Times columnist wrote, fans “all thought they were getting the Fight of
    the Century.”

Two
fighters who, if not in their prime, were at least in peak condition for the
fight of their lives.  What they got
instead was a one-armed Pacquiao chasing Mayweather around the ring for 12
rounds.  The Filipino who normally is a
punching machine landed only 18 right jabs and didn’t even throw as many
punches as the defensive-minded Mayweather.

His shoulder had been injured in training.  Injured so badly that Pacquiao will undergo
surgery this week for a rotator cuff tear.[4]


  1. Upon
    information and belief, Mayweather Promotions was aware of Pacquiao’s injured
    shoulder before the Match.  After the fight,
    the Business Insider reported[5]:

Top Rank CEO Bob Arum said the injury — which the
Pacquiao promoter said was a torn rotator cuff — happened about a month ago and
Pacquiao was denied a numbing injection by the Nevada State Athletic Commission
before the fight.

The day after the fight, Pacquiao revealed
something else in a news conference with Filipino media: Mayweather found out
about the injury before the fight through a leak.

“You saw he was pulling my hand.  He was doing that because he knew,” he told
Rappler.com.  “He was pulling it.  He was holding me, then he was targeting this.  I’m sure he found out.  Somebody leaked it to him.  They knew.”

  1. V.               
    CLASS ACTION
    ALLEGATIONS

  2. Plaintiff brings this lawsuit on behalf of himself and
    the proposed Class members under Rule 23(b)(2) and (3) of the Federal Rules of
    Civil Procedure. 

The proposed nationwide Class consists of:

All persons throughout the United States who purchased a
pay-per-view broadcast of the Mayweather-Pacquaio fight which took place in Las
Vegas, Nevada on May 2, 2015 (the “National Class”).

            The
proposed California subclass consists of:

All persons residing in California who purchased a
pay-per-view broadcast of the Mayweather-Pacquaio fight which took place in Las
Vegas, Nevada on May 2, 2015 (the “California Subclass”).


  1. Numerosity.  The
    class consists of tens of thousands of consumers.  Therefore, the members of the Class are so
    numerous that their individual joinder is impracticable.  The precise number of Class members is
    unknown to Plaintiff.

  2. Existence and Predominance of Common Questions of Law
    and Fact.  Common questions of law and
    fact exist as to all members of the Class and predominate over any questions
    affecting only individual Class members. 
    These common legal and factual questions include, but are not limited
    to:

  3. Whether Defendants withheld the information that
    Pacquiao had been seriously injured prior to the Match;

  4. Whether
    Defendants’ actions violated the NRS 598; NRS 41.600; NRS 598A and California
    Business & Professions Code §§ 17200 et
    seq
    .;

  5. Whether
    Defendants were unjustly enriched by their acts and omissions at the expense of
    the Plaintiff and the Class;

  6. Whether Plaintiff
    and members of the Class sustained damage and loss thereby;

  7. The scope,
    extent and measure of damages and equitable relief that should be awarded; and

  8. Whether
    Defendants’ acts and omission entitle Plaintiff and the Class to treble
    damages, attorneys’ fees, prejudgment interest and costs of suit.

  9. Typicality.  Plaintiff’s
    claims are typical of the claims of the members of the Class and Plaintiff has
    the same claims as those of the other Class members.

  10. Adequacy of Representation.  Plaintiff will fairly and adequately protect
    the interests of the members of the Class. 
    Plaintiff has retained counsel highly experienced in complex consumer
    class action litigation, and Plaintiff intends to prosecute this action
    vigorously.  Plaintiff has no adverse or
    antagonistic interests to those of the Class.

  11. Superiority.  A
    class action is superior to all other available means for the fair and
    efficient adjudication of this controversy. 
    The damages or other financial detriment suffered by individual Class
    members is small compared to the burden and expense that would be entailed by
    individual litigation of their claims against the Defendants.  It would thus be virtually impossible for the
    members of the Class, on an individual basis, to obtain effective redress for
    the wrongs done to them.  Furthermore,
    even if Class members could afford such individualized litigation, the court
    system could not.  Individualized
    litigation would create the danger of inconsistent or contradictory judgments
    arising from the same set of facts.  Individualized
    litigation would also increase the delay and expense to all parties and the
    court system from the issues raised by this action.  By contrast, a class action provides the
    benefits of adjudication of these issues in a single proceeding, economies of
    scale, and comprehensive supervision by a single court, and presents no unusual
    management difficulties under the circumstances here.

COUNT I

Statutory Consumer Fraud NRS 41.600

On Behalf of the National Class


  1. Plaintiff realleges and incorporates by reference the
    allegations contained in the paragraphs above as though fully set forth herein.

  2. Pursuant to
    NRS §§ 41.600(2)(e), 598.0915, and 598.0923 the Defendants knowingly engaged in
    predatory, wrongful, fraudulent and deceptive trade practices in violation of
    the Nevada Deceptive Trade Practices Act by engaging in certain prohibited
    conduct, including but not limited to:

  3. Engaging in a deceptive trade practice as
    defined in NRS 598.0915 to 598.0925, inclusive. 
    [See NRS 41.600(2)(e)]

  4. Failing to
    disclose a material fact in connection with the sale of... goods. [NRS
    598.0923(2)]

  5. Violating a
    state or federal statute or regulation relating to the sale ... of goods or
    services [NRS 598.0923(3)]

  6. Making any
    other false representation in a transaction. [NRS 598.0915(15)

  7. As a direct and proximate cause of the Defendants’
    deceptive trade practices/consumer fraud, as herein alleged, Plaintiff and the
    Class have been damaged.  Defendants in
    making the aforementioned material misrepresentations and/or concealing
    material facts from Plaintiff and the Class concerning the condition of
    Pacquiao, have acted willfully, intentionally, maliciously and fraudulently,
    with intent to deceive and defraud Plaintiff and the Class with great
    recklessness and carelessness in total disregard of the consequences of their intentional actions upon Plaintiff and the Class, thereby
    entitling the Plaintiff and the Class to exemplary or punitive damages.

COUNT II

Unjust Enrichment

On Behalf of the National Class


  1. Plaintiff realleges and incorporates by reference the
    allegations contained in the paragraphs above as though fully set forth herein.

  2. As a result of the unlawful conduct described herein,
    Defendants have been unjustly enriched at the expense of Plaintiff and the
    other members of the Class.

  3. Specifically, Defendants’ unfair and unlawful actions,
    as described herein, have enabled Defendants to receive money and other
    benefits in violation of the law at the expense of Plaintiff and the other
    members of the Class.

  4. Defendants’ receipt and retention of this financial
    benefit is unfair and improper under the circumstances.

  5. As such, Defendants should be required to disgorge the
    money they retained as a result of their unjust enrichment.

COUNT III

UNFAIR COMPETITION
LAW

(Violations of Cal. Bus. & Prof. Code § 17200 et. seq.)


On Behalf of the California Subclass


  1. Plaintiff realleges and incorporates by reference the
    allegations contained in the paragraphs above as though fully set forth herein.

  2. Defendants have engaged in unfair competition within
    the meaning of California Business & Professions Code Section 17200 et seq. because Defendants’ conduct is
    misleading and unfair as herein alleged. 

  3. Defendants’ business practices are misleading because
    they were likely to deceive consumers into believing that by promoting and
    disseminating information about the Match, that Pacquiao was healthy leading up
    to and entering the Match, and by making false and misleading representations
    while omitting accurate statements as alleged above.  If Defendants disclosed or provided accurate
    information that Pacquiao suffered an injury or any information related to the
    nature and extent of that injury, Plaintiff and members of the Class would not
    have purchased the “Fight of the Century,” via pay-per-view, distributed by
    various and numerous cable providers throughout the country.

  4. Defendants’ business practices, and each of them, are
    unfair because they offend established public policy and/or are immoral,
    unethical, oppressive, unscrupulous and/or substantially injurious to
    consumers, which harm greatly outweighs any benefit associated with the
    business practice, in that consumers were led to believe that the Match they were
    paying for via pay-per-view had qualities that it did not have.  Defendants’
    promotional efforts contained false and misleading statements and representations,
    for the purpose of increasing and maximizing pay-per-view purchases of the Match,
    including to Plaintiff and members of the Class.

  5. Plaintiff has standing to pursue this claim because he
    has been injured by virtue of suffering a loss of money and/or property as a
    result of the wrongful conduct alleged herein. 
    Plaintiff would not have paid for pay-per-view to watch the Match had he
    known the truth.

  6. Plaintiff and the Class are entitled to relief,
    including full restitution and/or restitutionary disgorgement, to the greatest
    extent permitted by law, which may have been obtained by Defendants as a result
    of such business acts or practices, and enjoining Defendants to cease and
    desist from engaging in the practices described herein.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment against the
Defendants, on his behalf and that of similarly
situated class members as follows:

A.        Certifying
the Class as requested herein;

B.        Awarding
Plaintiff and the proposed Class members damages;

C.        Awarding
restitution and disgorgement of Defendants’ revenues to Plaintiff and the
proposed Class members;

D.        Awarding
Plaintiff and the Class punitive damages;

E.         Awarding
attorneys’ fees and costs; and

F.         Providing
such further relief as may be just and proper.

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

JURY DEMAND

Plaintiff demands a trial by jury on all
issues so triable.

 

Dated:  May 6, 2015

ALBRIGHT,
  STODDARD, WARNICK & ALBRIGHT

 

By:
  _____________________________________

                          G. Mark Albright

 

G.
  Mark Albright

William
  H. Stoddard, Jr.

801
  S. Rancho Drive, Suite D-4

Las
  Vegas, NV  89106

Telephone:  (702) 384-7111

Facsimile:  (702) 384-0605

Email:
  gma@albrightstoddard.com

            bstoddard@albrightstoddard.com

 

 

 

KAPLAN
  FOX & KILSHEIMER LLP

Laurence
  D. King (applying for admission pro hac
  vice
)

Linda
  M. Fong (applying for admission pro hac
  vice
)

Mario
  M. Choi  (applying for admission pro hac vice)

350
  Sansome Street, Suite 400

San
  Francisco, CA 94104

Telephone:  415-772-4700

Facsimile:   415-772-4707

Email:  lking@kaplanfox.com

            lfong@kaplanfox.com

            mchoi@kaplanfox.com

(Pro
  hac vice pending)

 

 

Frederic
  S. Fox (applying for admission pro hac
  vice
)

KAPLAN
  FOX & KILSHEIMER LLP

850
  Third Avenue

New
  York, NY  10022

Telephone:
  (212) 687-1980

Facsimile:   (212) 687-7714

Email:  ffox@kaplanfox.com

(Pro
  hac vice pending)

 

Attorneys
  for Plaintiff JOHN ASSALIAN

 

 

Sample Form Motion to Add Litigant to Nevada's Vexatious Litigant List Per Nevada SCR 9.5

  
  
  

G. MARK ALBRIGHT,
ESQ.

Nevada Bar 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

ALBRIGHT,
STODDARD, WARNICK & ALBRIGHT

801 South Rancho
Drive, Suite D-4

Las Vegas,
Nevada   89106

Tel:   (702) 384-7111 / Fax:    (702) 384-0605

gma@albrightstoddard.com

bstoddard@albrightstoddard.com

Attorneys for Defendants

 

IN THE FIFTH JUDICIAL DISTRICT

 

NYE COUNTY, NEVADA

 

DEREK D.
  SCHAEFER,

J. MICHAEL
  SCHAEFER,

 

Plaintiffs,

vs.

 

PAUL VALDEZ,

STEPHEN HUNDLEY,
 

 

Defendants.

CASE NO.:     CV 36593

DEPT. NO.:    1

 

MOTION TO ADD PLAINTIFF J. MICHAEL SCHAEFER
  TO VEXATIOUS LITIGANT LIST IN NEVADA PER SCR 9.5

 

Date of
  Hearing:

Time of
  Hearing:

 

COMES NOW, Defendants, PAUL VALDEZ and STEPHEN HUNDLEY, (hereinafter “Defendants”
or “Valdez” or “Hundley”) and, by and through their attorneys, ALBRIGHT,
STODDARD, WARNICK & ALBRIGHT, and hereby request this Court designate the Plaintiff,
J. MICHAEL SHAEFER (hereinafter “Plaintiff” or “Schaefer”), a vexatious litigant
pursuant to Nevada Supreme Court Rule 9.5.

            DATED this _____ day of
April, 2015.

 

ALBRIGHT, STODDARD, WARNICK &

    ALBRIGHT

 

 

___________________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 S. Rancho Drive, Suite D-4

Las Vegas, Nevada  89106

(702) 384-7111

Attorneys
for Defendants

NOTICE
OF MOTION

 

TO:      ALL
PARTIES; AND

TO:      THEIR
COUNSEL OF RECORD

YOU, AND EACH OF YOU, WILL PLEASE TAKE NOTICE that the undersigned will
bring the foregoing MOTION TO ADD PLAINTIFF J. MICHAEL SCHAEFER TO VEXATIOUS
LITIGANT LIST IN NEVADA PER SCR 9.5
on for hearing before the
above-entitled Court on the _____ day of ____________, 2015 at the hour of
_____ o’clock, ____.m. on said date, or as soon thereafter as counsel can be
heard.

            DATED
this _____ day of April, 2015.

ALBRIGHT, STODDARD, WARNICK &

    ALBRIGHT

 

 

___________________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 S. Rancho Drive, Suite D-4

Las Vegas, Nevada  89106

(702) 384-7111

Attorneys
for Defendants

 

MEMORANDUM OF POINT & AUTHORITIES

Historical Review

The concept of vexatious litigation entered into law in 1896
with the Vexatious Actions Act, enacted in England and soon extended to
Scotland and Ireland.  This was a
response primarily to the actions of one person, Alexander Chaffers, a lawyer
who filed numerous actions against leading members of Victorian society. When
costs were awarded against him he failed to pay.

The first vexatious litigant law outside Britain was passed
in Australia in 1927, entitled the Supreme Court Act.  This too was prompted by the behavior of an
individual, Rupert Millane.  The first
Vexatious Litigant law in the United States was enacted in California in 1963.
By 2007 five US states had passed similar legislation: California, Florida,
Hawaii, Ohio, and Texas.  With the
increasing use of forms and sample drafts on the internet, the problem of
course has skyrocketed.  It comes as no
surprise that when the vexatious litigant (as in this case) is also a disbarred
attorney, the grief and harm caused to the judicial system and opposing parties
multiplies many fold.  The purpose of
state statutes and rules placing restrictions on vexatious litigants, is “to
prevent abuse of the judicial system by those persons who persistently and
habitually file lawsuits without reasonable grounds, or who otherwise engage in
frivolous conduct in the courts.”  See, 45 ALR 6th (2009), regarding state
vexatious litigant statutes.

  1. A.               
    Rule 9.5. List of Vexatious Litigants in
    Nevada.

This new Nevada Supreme Court Rule 9.5, creating a Nevada
list of vexatious litigants, became effective December 13, 2012.  (Exhibit
“A”
).  The new Nevada Rule provides as
follows:

Purpose and procedure.  The administrative office of the courts shall
maintain for use by the judicial council and the courts of the state a list of
litigants that have been declared as vexatious by any court, at any level of
jurisdiction, throughout the state.

(a)        Each court shall, upon
entering an order declaring a litigant to be vexatious, submit a copy of the
order to the director of the administrative office of courts or his or her
designee.

(b)        The director or
designee shall enter the name of the litigant identified in the aforementioned
order on a list of vexatious litigants and post the list in such a place so
that it will be readily accessible to various courts.  The director or designee shall maintain the
list in good order.

(c)        If a court takes any
action that affects the status of a litigant declared vexatious, the court
shall forward record of that action to the director or designee forthwith for
amendment of the list.

  1. B.                
    Propriety of Recommended Discipline Against
    Schaefer
    .

The Nevada Supreme Court in In re Discipline of J. Michael Schaefer, 117 Nev. 496, 25 P.3d. 191
(Nev. 2001), held as follows regarding the sad but colorful history of
Plaintiff J. Michael Schaefer:

The panel found one violation of SCR 170 (meritorious claims), one
violation of SCR 172 (candor toward the tribunal), one violation of SCR 173(3)
(fairness to opposing party and counsel: disobeying obligation to tribunal),
one violation of SCR 173(6) (fairness to opposing party and counsel: request
that witness refrain from providing information), four violations of SCR 182
(communication with represented party), one violation of SCR 203(1) (violation
of the rules of professional conduct), one violation of SCR 203(2) (criminal
act adversely reflecting on lawyer’s fitness), two violations of SCR 203(3)
(misconduct involving dishonesty, deceit, fraud or misrepresentation), and five
violations of SCR 203(4) (conduct prejudicial to administration of justice). As
discussed above, we do not consider one of the SCR 182 violations, since
Schaefer was representing himself in that instance. We also disregard two of
the SCR 182 violations, the SCR 203(1) violation, the SCR 203(2) violation and
four of the SCR 203(4) violations, as no such violations were charged in the
complaint based upon the particular conduct relied upon by the panel.

The panel also found that the aggravating factors of a pattern of
misconduct, multiple offenses, and Schaefer’s refusal to acknowledge the
wrongfulness of his actions had been shown by clear and convincing evidence. We
conclude that the record supports the panel’s finding of aggravating
factors.  Multiple offenses have been
shown, as has a pattern of misconduct. In addition, Schaefer steadfastly
maintains that all of his conduct was permissible, and fails to acknowledge in
any way that his conduct was wrongful
.

Schaefer’s discipline history is of relevance in determining the
appropriate sanction to be imposed, and it includes two public reprimands and a
suspension. The first public reprimand was by this court in 1981 for
taking a default without notice to opposing counsel even though counsel had
appeared in the action, and for engaging in settlement discussions with a
represented party without counsel’s consent. 
Schaefer also received a public reprimand from this court in 1995,
as reciprocal discipline based on a 1993 California order including numerous
probationary conditions, for (1) willfully failing to maintain the respect due
the courts by disobeying a United States District Court order of October 13,
1993; (2) making a threatening statement to opposing counsel; and (3)
failing to safeguard a client’s files after the termination of his
representation.  In 1998, Schaefer
received a one-year stayed suspension from this court, with 30 days actually
served, as reciprocal discipline for a 1997 California order
, based on
Schaefer’s failure to comply with the probationary conditions imposed by the
California court’s 1993 disciplinary order.

We conclude that disbarment is warranted.  The record reflects a blatant disregard by
Schaefer for the rights of others and the administration of justice
. This
pattern is demonstrated by Schaefer’s actions in naming the Thaler Trust as a
party without authorization, his attempt to influence a witness’s testimony,
his self-serving award of costs without court order, and his false affidavit to
the Texas court.  Schaefer’s
persistent refusal to recognize that any of his actions were improper indicates
that his behavior is not likely to improve in the future
.  Under these circumstances, disbarment is the
only sanction that will adequately serve the purposes of attorney discipline:
to protect the public and the integrity of the bar.

Accordingly, John
Michael Schaefer is disbarred. Schaefer shall pay the costs of the disciplinary
proceeding within thirty (30) days, and Schaefer and the state bar shall comply
with SCR 115.

Although reprimanded in Nevada in 1981 and 1995, and disbarred
in Nevada in 2001, Plaintiff continues to represent others in Nevada Courts.  His efforts to be reinstated to the Nevada
Bar have been repeatedly rejected.

In addition, Schaefer was disbarred in California (Exhibit “B”), in 2005.

As he has done in earlier cases, Schaefer has violated a
recent protective order.  He previously
violated the Justice Court’s “no contact order” as described by the Nevada
Supreme Court in In re Discipline of J.
Michael Schaefer,
at p. 502.

Texas has also been injured by Schaefer’s misconduct.  As described by the Supreme Court in Schaefer, p. 504, Mr. Schaefer failed to
disclose his miserable disciplinary history in a pro hac vice application to a Texas court.  He failed to disclose that he had been
publicly reprimanded in California in 1993 and that he had received a public
reprimand in Nevada in 1995.  Schaefer
was also suspended in California in October 1997, for which he also received
reciprocal discipline in Nevada in May of 2008, all of which he conveniently
failed to report to the Texas Bar.

C.        Nye
County Case No. CV 36593
.

Mr. Schaefer clearly feels that he is above the law and
beyond the reach of the California Supreme Court, the Nevada Supreme Court and
the Texas Supreme Court and their respective state bars.  He has ignored all of the many decades worth
of cases, reprimands, disciplines, fines and punishment imposed against him and
has recently, on March 5, 2015, filed a new complaint in the Fifth Judicial
District Court of Nevada for the County of Nye, against Paul Valdez and Stephen
Hundley. 

In this new complaint, a copy of which is attached hereto as Exhibit “C,” and incorporated herein by
this reference, J. Michael Schaefer took the position that he was signing the
complaint for himself and as “an assignee and power of attorney as assignee to
all the rights of his adult son Derek D. Schaefer Co-Plaintiff.”  In other words, J. Michael Schaefer, a
disbarred attorney in multiple jurisdictions whose applications to be
readmitted to the State Bar have been repeatedly rejected, has now decided that
he can represent other parties by simply obtaining their “power of attorney.”  This curious but illegal method to circumvent
the disbarment rules of the Supreme Court of Nevada was immediately rejected by
the Nye County Court who wisely and immediately dismissed the rogue Complaint
filed in Nye County.  (Exhibit “D”).

D.        The
Discredited Power-of-Attorney Argument
.

The ridiculous assertion that a person can easily circumvent
bar license requirements by simply obtaining a “power-of-attorney” has been
repeatedly rejected in multiple jurisdictions. 
For example, in 70 Ops. CA Atty Gen. 208 (Cal AG 1993), the office of
the Attorney General of the State of California explained as follows:

In 3 Am. Jur.2d
Agency, Section 23, Page 433, the basic conceptions of attorney-at-law and
attorney-in-fact are thus contrasted. 
The person holding a power-of-attorney is known and designated as an
attorney-in-fact, thus distinguishing such person from an attorney-at-law.  A power-of-attorney does not permit an agent
to act as an attorney-at-law.  If the
rule were otherwise, the State Bar Act could be relegated to contempt by any
layman who secured from his principal an ordinary power of attorney, for the
purpose of representing him in pending litigation
.  An attorney-at-law is different from an
attorney in fact by definition and by general customary treatment.  Thus, at the time of the enactment of
(certain California statutes), the rule was that a power of attorney could not
be used as a device to allow an unlicensed agent to engage in the practice of
law.  (Emphasis added.)

 

Likewise, in Russell v.
Dopp,
36 Cal. App.4 765 (Cal. App.4 1995), the court held as follows:

The general American rule is that an unlicensed person cannot appear in
court for another person and that the resulting judgment is a nullity.  7 Corpus Secundum Attorney and Client ş31, p.
869.  The court noted as follows from an
earlier California decision:

In People ex rel. Dept of
Public Works v. Malone (1965),
232
Cal. App.2d 531, 42 Cal. Rptr. 888, the court held that Caroll Malone, a person
holding a special power of attorney, could not act as an attorney for his
brother, Paul Malone, in litigation.  The
court quoted from the Campbell  case and held that a power-of-attorney could
not permit an agent to act as an attorney-at-law
.  (Campbell
v. Jewish Com. for Service
(1954), 125 Cal.App.2d 771, 271 P.2d 185).  Accordingly Caroll Malone did not have any
right to act for his brother Paul in litigation.  The action in Carroll Malone in stipulating
to a condemnation judgment on behalf of both brothers was held a nullity.  (Emphasis added.)

Similarly, the court in Russell v. Dopp went on to hold that a
judgment entered after a jury trial against the defendants would be set aside
since their attorney was not a licensed California attorney and had been
disbarred many years before (with charges pending against him) in 1969.  The fact that the attorney was related to one
of the parties, and in fact was the father of one of the parties, was deemed
irrelevant because of the danger it would impose on the courts to have unlicensed
individuals practicing law as follows
:

In addition to being a fraud on unknowing clients, the
representation of a client by an unlicensed person in court is a fraud on the
court.  The policy in this situation is
the protection of the integrity of the judicial process itself
.  If one party is represented by skilled
counsel, and the other party is represented by an unlicensed person, the fraud
is on the court because of the likelihood that the judicial process cannot
function properly when the litigants are unequal in basic competence.  For this reason, the general rule is that the
proceeding is nullity, and a judgment obtained in such a case is void and will
be reversed.  Id. at 777-778.  (Emphasis added.)

E.        The Courts Have Also Rejected the Corporate
Assignment Argument (Esmeralda County Case No. 13-1086)
.

Unbelievably, the shenanigans of J. Michael Schaefer do not
cease with the above dozens and dozens of examples since 1981.  Rather, an additional unfortunate example of
his repeated violations of Nevada law is that Mr. Schaefer (as a purported
assignee and Secretary/Treasurer of Schaefer-Nevada Inc., a Nevada corporation),
filed a complaint on May 10, 2013 with the Justice Court of Esmeralda County,
Nevada, as Case No. 13-1086 CV.  His victim
in the case was Desert Boilers.  A true
and correct copy of the Esmeralda County complaint against Desert Boilers &
Controls, Inc., and Tonopah Asset Management, Inc. is attached hereto as Exhibit “E,” (the “Esmeralda
Complaint”).  In this verified rambling complaint, signed
by J. Michael Schaefer as “assignee Plaintiff pro per,” the first paragraph
explains his true relationship to the true plaintiff party:

Plaintiff J. Michael Schaefer is Secretary/Treasurer of Schaefer-Nevada
Inc., a Nevada corporation, and is assignee of miscellaneous claims it may
have pursuant to formal assignment
, it being his obligation to prudently
manage the assets and obligations of his assignor.  The fruits of any claims activity belong to
assignee.  (Emphasis added.)

In other words, J. Michael Schaefer attempted in his
Esmeralda Complaint to simply assign a corporate claim to himself so that he
could handle it in pro per
.  That deceptive
trick has been addressed and rejected by the Nevada Supreme Court.  In J.
Michael Sunde
v. Contell of
California,
 112 Nev. 541,  915 P.2d 298 (Nev. 1996), J. Michael Sunde,
as President of Westcom Long Distance Inc., assigned the corporation’s legal
claims to himself and added himself as a party to the complaint so that he
could represent his own interests and those of Westcom in proper person
.  The Nevada Supreme Court expressly rejected
this bogus and illegal attempt as follows:

Non-lawyers
generally may not represent another person or an entity in a court of law.  Roland
v. CA Mens Colony,
 506 U.S. 194,
201-03, 113 S.Ct. 716, 721, 121 L.Ed.2d 656 (1993).  Some courts have allowed non lawyers to
represent entities in court under certain circumstances.  See,
e.g., Vermont ANRV Upper Valley Reg. Land Fill,
159 Vt. 454, 621 A.2d 225,
228 (1982).  This court however, has
consistently required attorneys to represent other persons and entities in
court
Salman v. Newell, 110 Nev. 1333, 885 P.2d 607 (1994); Pioneer Title v. State Bar,  74 Nev. 186, 189-90, 326 P.2d 408, 410 (1958);
see also NRS 7.285 (no person allowed
to practice law in Nevada unless admitted to Nevada State Bar).  Sound policy reasons support requiring entities
to be represented only by licensed counsel. 
The reasons are principally that the conduct of litigation by a non
lawyer creates unusual burdens not only for the party he represents but as well
for the adversaries and the court.  The
lay litigant frequently brings pleadings that are awkwardly drafted, motions
that are inarticulately presented, proceedings that are needlessly multiplicative.  In addition to lacking the professional
skills of a lawyer, the lay litigant lacks may of the attorney’s ethical
responsibilities, e.g. to avoid litigating unfounded or vexatious claims
Jones
v. Niagara Frontier Transportation Authority,
722 F.2d 20, 22 (2d Cir
1983).  Requiring attorney representation
also protects the public by helping to insure that its interests are
competently litigated.  Margaret Maunder Assoc. v A-1 Copy, Inc., 40 Conn. Sup. 361, 499 A.2d 1172, 1174
(1985).  We grant Contell’s motion to
require Westcom to be represented by counsel . . . in this appeal, and we deny
Sunde’s motion to proceed in proper person.

Sunde v. Contell of Nevada, 112 Nev. 541, 915 F.2d 298 (Nev. 1996)
(emphasis added).

Of course, in this case, unfortunately,
it is even more dangerous to the public, the courts and the clients to allow J.
Michael Schaefer, a well-known and well-recognized vexatious litigant in
Nevada
, to proceed in proper person, particularly when he is representing a
corporate entity.  Given his colorful and
disgraceful history in the State of Nevada and in courts throughout the State
of Nevada, he should be added to the Rule 9.5 list immediately.  His pleadings are awkwardly drafted, motions
are inarticulately presented, his proceedings are needlessly duplicative, and
he clearly lacks the professional skills of a lawyer, and ignores the
attorney’s ethical responsibilities. 
There is no question that he litigates unfounded and vexatious
claims.  Courts have previously tried to
control Schaefer, but he has refused to pay the fines imposed as punishment.  Hence, he is not only a vexatious litigant,
he is a dangerous nuisance to the courts. 
See, In re Discipline of Schaefer.

F.         Federal
Approaches
.

The
result would not be different in federal courts, which also prohibit corporate
assignment of claims to be handled pro per.  In Capital
Group, Inc. v. Gaston & Snow
, 768 F. Supp. 264 (E.D. Wis. 1991), the
court held as follows about corporate assignments to non-attorney litigants:

Appearances before a federal court are governed by 28 U.S.C. § 1654, which
provides:

In all courts of the United States the parties may plead and conduct their
own cases personally or by counsel as, by the rules of such courts,
respectively, are permitted to manage and conduct causes therein.

Although § 1654 permits an individual to proceed pro se in federal court,
the statute does not permit an individual to appear on behalf of a corporation.
Strong Delivery Ministry Association v. Board of Appeals, 543 F.2d 32,
34 (7th Cir. 1976). Moreover, a corporation "is an abstraction, and an
abstraction may not appear pro se." Scandia Down Corp. v. Euroquilt,
Inc.,
772 F.2d 1423, 1427 (7th Cir.1985). For this reason, the Court of
Appeals for the Seventh Circuit has held that a corporation must appear by
counsel or not at all. See Strong Delivery Ministry Association, 543
F.2d at 33-34; Scandia Down, 772 F.2d at 1427. This rule ensures that
the various interests in the corporate party are effectively represented. A
corporation is "just a complex web of contracts among managers, workers,
and suppliers of equity and debt capital," and all those interests may not
be aligned with those of the lay person seeking to represent the corporation. Scandia
Down,
772 F.2d at 1427. This rule further protects the court and the
public from irresponsible behavior by lay advocates who lack many of the
attorney's ethical and legal responsibilities and who often are incapable of
presenting legal arguments in an articulate, concise manner
.  See Lewis v. Lenc-Smith Manufacturing Co.,
784 F.2d 829, 830-31 (7th Cir.1986).

Mr. Gowan does not escape this rule because he is the president and sole
shareholder of The Capital Group, Inc., or because he purports to have been
assigned The Capital Group, Inc.'s interest in this lawsuit
.  In Scandia Down the court of appeals
for the seventh circuit noted that a non-lawyer may not appear on behalf of a
corporation, even if that person is the president and sole shareholder of the
corporation. Scandia Down, 772 F.2d at 1427.

Other federal courts of appeals have expressly disapproved the procedure of
assigning a corporation's claims to a non-lawyer in order that the non-lawyer
might prosecute the corporate claims. See Jones v. Niagara Frontier
Transportation Authority,
722 F.2d 20, 23 (2d Cir.1983); National
Independent Theater Distributors, Inc. v. Buena Vista Distribution Co.,
748
F.2d 602, 610-11 (11th Cir.1984).” 
(Emphasis added.)

Id. at 266.

G.        Additional
Factors Warranting Inclusion on Nevada’s List of Vexatious Litigants
.

The
following additional facts support the inclusion of J. Michael Schaefer on
Nevada’s List of Vexatious Litigants:


  1. Plaintiff filed “sham” Complaint No. CV 36593 in the
    wrong venue causing Defendants undue hardship. 
    (as supported by the Dedclarations of Defendants Stephen Hundley and
    Paul Valdez, and Ed Yist - Exhibits “F,”
    “G” and “H”
    )

  2. Plaintiff filed “sham” Complaint No. CV 36593 naming
    the wrong Plaintiffs and naming the wrong Defendants.  .  (as
    supported by the Dedclarations of Defendants Stephen Hundley and Paul Valdez,
    and Ed Yist - Exhibits “F,” “G” and “H”)

  3. Plaintiff’s “sham” Complaint No. CV 36593 was dismissed
    by Judge Wanker in the 5th Judicial District Court. (as supported by the
    Dedclarations of Defendants Stephen Hundley and Paul Valdez, and Ed Yist - Exhibits “F,” “G” and “H”)

  4. After the dismissal, Plaintiff did not stop harassing
    Defendants outside of the Court room.  .  (as supported by the Dedclarations of
    Defendants Stephen Hundley and Paul Valdez, and Ed Yist - Exhibits “F,” “G” and “H”)

  5. Plaintiff threatened Defendants in the Courthouse
    Hallway. (as supported by the Dedclarations of Defendants Stephen Hundley and
    Paul Valdez, and Ed Yist - Exhibits “F,”
    “G” and “H”
    )

  6. Plaintiff J. Michael Schaefer stated, “If you do not
    give me the building back by April first, this is going above the Courts.”  .  (as
    supported by the Dedclarations of Defendants Stephen Hundley and Paul Valdez,
    and Ed Yist - Exhibits “F,” “G” and “H”)

  7. Plaintiff J. Michael Schaefer grabbed or yanked
    Defendant Valdez’ arm.  .  (as supported by the Dedclarations of
    Defendants Stephen Hundley and Paul Valdez, and Ed Yist - Exhibits “F,” “G” and “H”)

  8. Plaintiff blocked the use of the Courthouse restroom
    for Defendants (see, Witness
    Statements, attached as Exhibits “F,”
    “G” and “H”
    ).

  9. Defendants have been experiencing unrelenting injurious
    tort actions from Plaintiff.  Defendants
    have already incurred large costs defending against Plaintiff’s “sham” Nye
    County Complaint, No. CV36593. 

  10. Defendants have suffered slander, libel, and threats
    against Defendants by Plaintiff. 
    According to Plaintiff J. Michael Schaefer, “This is going above the
    Courts”; causing Defendants grievous emotional harm, and substantial concern
    for their safety and well being.

  11. Defendants’ health and mental well being are suffering due
    to Plaintiff’s unrelenting and vexatious actions against Defendants.  Plaintiff’s actions have greatly harmed and
    injured Defendants’ reputation in the small town of Tonopah, Nevada.

  12. Plaintiff has knowingly and willfully ignored multiple
    Court Orders including an Order of Protection No. 15-1114 CV and the Nevada
    Supreme Court Order No. 36173 barring Plaintiff’s abuse of process and
    disbarring Plaintiff J. Michael Schaefer from any legal practice in Nevada.

H.        Schaefer Represents Himself to Others as a Licensed Nevada
Attorney
.

Perhaps
one of the most condemning factors is that when Movants met with Schaefer in
April, 2012, about purchasing an apartment complex in Tonopah, Nevada from
Schaefer, Mr. Schaefer misrepresented and lied to the purchasers (Defendants
herein) that he was a licensed Nevada attorney and would and could represent
them in the transaction.  The Defendants agreed,
and allowed Schaefer to draft the various sale documents (assuming Schaefer was
a licensed attorney) but Schaefer has never provided the movants with copies of
the documents.  After the closing he has
harassed them unmercifully.  First he
pressured a large settlement payment of approximately $150,000 to resolve the
dispute arising out of the transaction, signed a Grant Bargain & Sale Deed,
and then later Schaefer sued the Buyers (Defendants) in Nye County (the “Nye
County Complaint”).

I.          Potential for Court Access Restrictions.

The facts mentioned above overwhelmingly show Defendants= injurious actions against
Plaintiffs and others, will not stop without additional relief from the
Courts.  Movants Paul Valdez and their
assets need to be protected from this litigious predator.  Adding his name to the Nevada Supreme Court
list puts attorneys and judges throughout the State on notice and to proceed
with caution whenever his name appears on a pleading.  It is likely this action will not curtail
future filings from this habitual litigant, but at least the courts, attorneys
and others will be on notice.

If any additional frivolous pleadings are filed hereafter,
Movants will request that in addition to being placed on Nevada’s vexatious
litigant list, that the court enter a “pre-filing order” that prohibits this
vexatious litigant from filing any new litigation in Nevada in pro per without first obtaining
permission from the presiding justice or presiding judge of the court where the
newly proposed filing is proposed. A vexatious litigant who disobeys such a
pre-filing order may be punished for contempt of court.  Movants submit that the presiding justice or
presiding judge should permit the filing of such litigation only if it appears
that the litigation has merit and is not being filed for the purpose of
harassment or delay and potentially condition the filing of the new litigation
upon the furnishing of security for the benefit of the defendants.  The four factors for Nevada Courts to
consider when imposing Court Access Restrictions are carefully outlined in Jordan v. State of Nevada, 121 Nev. 44,
100 P.3d 30 (Nev. 2005).

In Jordan, the
Nevada Supreme Court enumerated four factors to restrict future frivolous suits,
as follows:

First the
litigant must be provided reasonable notice of an opportunity to oppose a
restrictive order’s issuance.  Second,
the District Court must create an adequate record for review, including a list
of all the cases and documents or an explanation of the reasons, that led it to
conclude that a restrictive order was needed to curb repetitive or abusive
activities.  Third, the District Court
must make substantive findings as to the frivolous or harassing nature of the
litigant’s actions.  Thus, the restrictive
order cannot issue merely upon a showing of litigiousness.  The litigant’s filings must not only be
repetitive or abusive, but also be without arguable factual or legal basis, or
filed with the intent to harass.  Fourth,
the order must be narrowly drawn to address the specific problem
encountered. 

Jordan, 110
P.3d at 60.

The court also noted that when a litigant’s misuse
of the legal system is pervasive, a restrictive order that broadly restricts a
litigant from filing any new actions without permission be narrowly drawn.  The court also noted that although Nevada
does not have, like some other states, a statute which limits access to the courts
for vexatious litigants, Nevada courts “possess inherent powers of equity and
of control over the exercise of their jurisdiction.  We recognize that these authorities bestow
upon Nevada courts the power to permanently restrict a litigant’s right to access
the courts.”  Jordan v. State, 110 P.3d at 39.

J.         Conclusion.

It is respectfully submitted that the aggregating factors set forth above,
show a pattern of misconduct, multiple offenses, in multiple jurisdictions,
before multiple courts, which illustrate that J. Michael Schaefer is clearly,
as a matter of law, a vexatious litigant, who, by his conduct, should be
immediately included on the new Nevada Supreme Court Rule 9.5 list of vexatious
litigants.  Movants respectfully submit
that the inclusion of the Plaintiff on the 9.5 list has been shown by clear and
convincing evidence over a period of many years, by numerous suspensions,
reprimands, fines and disbarments. 
Moreover, the multiple offenses over many years, and numerous
jurisdictions, clearly shows a pattern of misconduct particularly inasmuch as
Schaefer has never acknowledged in any way that his conduct was wrongful.  Moreover, Schaefer’s persistent refusal to
recognize that any of his improper vexatious actions were wrongful in any way,
indicates that his behavior is not likely to improve in the future.  The State Bar has indicated to the
undersigned that Schaefer shuld indeed be included in the list.  Consequently, either now or upon the next
filing, this Honorable Court should impose an order limiting future court
access to Schaefer and requiring that future filings be approved before harming
future litigants and burdening future courts, particularly if those future
filings involve these Defendants or their companies or property.

DATED this _____ day
of April, 2015.

 

ALBRIGHT, STODDARD, WARNICK &

    ALBRIGHT

 

 

___________________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 S. Rancho Drive, Suite D-4

Las Vegas, Nevada  89106

(702) 384-7111

Attorneys
for Defendants

 

 



Sample Form of Forbearance Agreement and Covenant Not to Execute

  
  
  

FORBEARANCE AGREEMENT AND

COVENANT NOT TO EXECUTE

 

 

            THIS FORBEARANCE AGREEMENT AND
COVENANT NOT TO EXECUTE is entered into this _____ day of April, 2015, by and
between Laboratory Corporation, a Delaware corporation, qualified to do
business in Nevada (“Judgment Creditor” ), and Diagnostic Center of Medicine
(Allen LLP), a Nevada limited liability company (“Judgment Debtor”).

 

RECITALS

 

            WHEREAS, Judgment Creditor
presently has a claim for unpaid invoices against the Judgment Debtor as set
forth in the Complaint filed on June 24, 2014 as Case No. A-14-702958-C in the
Eighth Judicial District Court, Clark County, Nevada (the “Litigation”);

 

            WHEREAS, Judgment Creditor’s
claims were reduced to a Default Judgment filed in the Litigation on April 8,
2015, granting Judgment Creditor judgment against Judgment Debtor as follows:

 

                                    Principal                                              $114,645.16

                                    Pre-judgment
interest                              18,562.89

                                    Costs                                                            727.40

 

                                    Total
Judgment                                   $133,664.25

 

together
with interest on all sums thereof outstanding from March 1, 2015 at the rate of
twelve percent (12%) per annum until paid in full, and attorneys’ fees in the
amount of $3,500.00;

 

            WHEREAS, Judgment Creditor
has agreed to forbear on the terms and conditions set forth in this Agreement,
provided that Judgment Debtor executes, delivers, observes and performs this
Agreement; and

 

            WHEREAS, Judgment Debtor has
agreed to do so, all in accordance with the terms hereof.

 

            NOW, THEREFORE, in
consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Judgment Creditor and Judgment Debtor agree as follows:

 

            1.         Judgment
Debtor has requested and Judgment Creditor has agreed, to and in accordance
with the terms of this Agreement, that although the amounts are presently due
under the Default Judgment described above, Judgment Creditor will forbear from
taking immediate legal action to execute on its Default Judgment or to otherwise
garnish or levy the Judgment Debtor in order to collect the amounts due, but
only for so long as Judgment Debtor complies with the terms of this Agreement.

 



            2.         Judgment
Debtor agrees to pay the foregoing amounts at the rate of Twenty Thousand
Dollars ($20,000.00) per month, the first payment being due on May 15, 2015,
and the remaining payments being due on the third Friday of each month, until
the full amount owed has been paid in full.

 

            3.         Each
payment hereunder shall first be applied to collection costs and attorneys’
fees, then to accrued interest, and then to the remaining principal amount due
hereunder.

 

            4.         So
long as payments remain current hereunder, Judgment Creditor agrees that it
will not at any time, nor shall anyone on its behalf, enforce by execution or
otherwise, the Default Judgment which has been rendered in the Litigation as
set forth above.

 

            5.         Judgment
Debtor shall have ten (10) days after notice of the default is delivered to its
counsel of record, Alan C. Sklar, Esq., of Sklar Williams PLLC, 410 South
Rampart Boulevard #350, Las Vegas, Nevada 89145 to cure any default.

 

            6.         If
Judgment Debtor fails to make any monthly payment as it becomes due and payable
hereunder on or before the due date, then in that event Judgment Creditor shall
be considered delinquent in its payments and shall, as a result thereof, be in
default hereunder.  If the Judgment
Debtor fails to cure the default within ten (10) days as aforesaid, then the
entire outstanding remaining principal amount hereof, together with all accrued
interest, costs and fees, will be deemed automatically and immediately due and
payable, and the Judgment Creditor may thereupon immediately commence execution
proceedings on the Judgment Debtor.

 

            7.         This
Covenant Not to Execute shall be interpreted according to Nevada law, and each
party is entitled to enforce this Covenant and recover any costs or fees which
it may incur in the enforcement of this Covenant in the event of a default by
the other party. 

 

            8.         It
is further agreed that this Covenant Not to Execute will not be filed with the
Clerk of the Court and will not be recorded, but entry and recordation shall be
stayed so long as the Judgment Debtor is current with its payments hereunder.

 

            9.         At
such time as payment in full is made hereunder, without any uncured default
having ever occurred hereunder, then the Judgment Creditor shall execute a
Satisfaction of Judgment and file it in the Litigation.  Judgment Creditor shall also return to
Judgment Debtor’s counsel the original of this document or, if the original has
been lost, Judgment Creditor shall affirm that the document shall never be
entered in the Litigation and will be destroyed if found. 

 

            10.       Judgment
Debtor has requested and Judgment Creditor has agreed, to and in accordance
with the terms of this Agreement, that although the amounts are presently due
under the Default Judgment described above, Judgment Creditor will forbear from
taking immediate legal action to execute on its Default Judgment or to otherwise
garnish or levy the Judgment Debtor in order to collect the amounts due, but
only for so long as Judgment Debtor complies with the terms of this Agreement.

 

            11.       Judgment
Debtor agrees to execute and deliver to Judgment Creditor at the time of
execution of this Agreement or immediately thereafter upon preparation by
Judgment Creditor, such guarantees, amendments, security agreements and
financing statements as Judgment Creditor, in its sole discretion, deems
necessary.  Judgment Creditor’s failure
or refusal to execute such documents shall constitute default hereunder.

 

            12.       Without
waiving, curing or ceasing the continuance of the defaults, Judgment Creditor
will forbear from taking collection action regarding the Default Judgment until
an uncured default occurs as aforesaid (“Forbearance Period”), provided that
such forbearance in no way relieves Judgment Debtor from liability under the
Default Judgment or constitutes a waiver of Judgment Creditor’s rights or
remedies.

 

            IN WITNESS WHEREOF, the parties have
executed this Forbearance Agreement and Covenant Not to Execute on the day and
year first above written.

 

                                                                                    JUDGMENT
CREDITOR:

 

                                                                                    LABORATORY
CORPORATION OF

                                                                                    AMERICA

 

 

                                                                                    By________________________________

                                                                                    Print
Name: ________________________

                                                                                    Title:
______________________________

                                                                                   

                                                                                    JUDGMENT
DEBTOR:       

 

                                                                                    DIAGNOSTIC
CENTER OF MEDICINE

                                                                                    (ALLEN)
LLP

 

 

                                                                                    By________________________________

                                                                                    Print
Name: ________________________

                                                                                    Title:
______________________________

 

 



Slip and Fall Sample Form Complaint in Las Vegas, Nevada

  
  
  

slip fall injury report

 

DISTRICT COURT

 

CLARK COUNTY, NEVADA

 

MARY CARROLA, 
  an individual, and ANDRES CARROLA, an individual

 

                                    Plaintiffs,

 

vs.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
  banking association;  and SCP
  2006-C23-104 LLC; DOES I through X, and ROE CORPORATIONS I through XX,
  inclusive,

 

                                    Defendants.

CASE NO.:    

DEPT. NO.:   

 

 

 

COMPLAINT

 

 

COMES NOW, Plaintiffs, MARY CARROLA,
an individual, and ANDRES CARROLA, an individual, by and through their
attorneys of record, ALBRIGHT, STODDARD, WARNICK & WARNICK, and as and for
their Complaint against Defendants WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, and SCP 2006-C23-104 LLC, DOES I through X, and ROE
CORPORATIONS I through XX, inclusive (hereinafter collectively the
“Defendants”) alleges and avers as follows:

GENERAL ALLEGATIONS


  1. Plaintiff, MARY CARROLA (hereinafter referred to as
    “Plaintiff Mary”), is and was at all times relevant hereto, a resident and
    citizen of the State of Nevada.

  2. Plaintiff,
    ANDRES CARROLA (hereinafter referred to as “Plaintiff Andres”), is and was at
    all times relevant hereto, a resident and citizen of the State of Nevada.

  3. Upon
    information and belief, at all times mentioned herein, Defendant WELLS FARGO
    BANK, NATIONAL ASSOCIATION, was and is a National Banking Association duly
    authorized to conduct business in the State of Nevada.

  4. Upon
    information and belief, at all times mentioned herein, Defendant SCP
    2006-C23-104 LLC, was and is a Foreign Limited Liability Company duly
    authorized to conduct business in the State of Nevada.

  5. Upon
    information and belief, at all times mentioned herein, said Defendants owned,
    operated, controlled, and/or maintained, without limitation, that certain
    property and surrounding sidewalks, and common areas, located at 4014 South
    Rainbow Boulevard, Las Vegas, Nevada wherein the accident at issue occurred for
    the purpose of carrying on a business for profit (hereinafter the “Premises”).

  6. Upon
    information and belief, at all times mentioned herein, Doe Defendants I-X and
    Roe Defendants I-XX were legal residents or entities of Clark County, Nevada,
    and authorized to do business by the State of Nevada.  Furthermore, said Doe and Roe Defendants were
    employees, agents, or servants of Defendants and functioned and assisted in the
    operation, control and/or management of said premises.

  7. The
    true names and capacities, whether individual, corporate, associate or
    otherwise, of Defendants DOES I through X and/or ROE CORPORATIONS I through XX,
    inclusive, are unknown to Plaintiffs, who therefore sue said Defendants by such
    fictitious names.  The Plaintiffs are
    informed, believe and thereupon allege that the Defendants designated herein as
    DOES I through X and/or ROE CORPORATIONS I through XX, inclusive, are any one
    of the following:

            (a)        Parties responsible in some manner for
the events and happenings herein referred to that caused injuries and damages
proximately thereby to the Plaintiff as herein alleged;

            (b)        Parties that are the agents, servants,
employees and/or contractors of the Defendants, each of them acting within the
course and scope of their agency, employment or contract;

            (c)        Parties that own, lease, manage,
operate, secure, inspect, repair, maintain and/or are responsible for the
premises referred to hereinafter; or

            (d)       Parties that have assumed or retained the
liabilities of any of the Defendants by virtue of an agreement, sale, transfer
or otherwise;

            8.         Plaintiffs will ask leave of the Court
to amend this Complaint to insert the true names and capacities of said
Defendants, DOES I-X and ROE CORPORATIONS I-XX, inclusive, when the same have
been ascertained by the Plaintiffs, together with appropriate charging
allegations, and to join said Defendants in the action.

            9.         At the time and place aforesaid, the
Defendants did carelessly and negligently operate and maintain the exterior
walkway and patio area of the Wells Fargo exterior ATM machine and allowed
rocks, gravel and stones thereon. 

            10.       Employees of the Defendants did operate
and maintain the exterior walkways near the ATM machine in a careless and
negligent manner, which resulted in the injury to Plaintiff Mary when she
slipped and fell on the rocks and loose gravel in front of the ATM machine
which constituted a dangerous condition that was not open and obvious to
business invitees.

            11.       As a result of the dangerous conditions
existing on Defendants’ property, Plaintiff Mary slipped and fell causing
grievous injury to her person and mental and emotional damage in an amount
undetermined, and which required surgical intervention and the insertion or
placement of metal plates, screws and rods to repair the broken bones.

            12.       After falling and breaking her arm and
leg, Plaintiff Mary was taken by ambulance from the Wells Fargo Bank accident
scene to the hospital.

            13.       As a proximate result of the negligence
and carelessness of the Defendants, and each of them, Plaintiff Mary was caused
to be injured in her health, strength and well-being, sustained severe and
permanent injury to her body, shoulders, arms and legs, and shock and injury to
her nervous system and person, all of which has caused Plaintiff Mary, and will
continue to cause Plaintiff Mary in the future, severe mental, physical and
nervous pain and suffering, and has caused Plaintiff Mary to suffer general
damages in excess of $10,000.

            14.       As a further proximate result of the
aforementioned negligence and carelessness of Defendants, and each of them,
Plaintiff Mary was required to, and did, employ physicians, surgeons, and other
health care providers to examine, treat and care for her and she did incur
medical and incidental expenses thereby, the exact amount of which expenses are
unknown at the present time, but Plaintiff Mary alleges that she suffered
special damages in excess of $10,000.

            15.       Plaintiff Mary suffered grievous physical
injuries to her body as well as mental and emotional distress, which occurred
as a result of the Defendants, and each of them, allowing stones and landscape
rock and gravel around and/or on the ATM machine patio and walkway with no
barriers or dividers, allowing customers to walk over and through the landscape
beds, rocks and stones, thereby distributing stones regularly and commonly on
the concrete walkway and on the concrete ATM patio, by failing to place any
sort of railing or barrier to prevent the spreading of the rocks onto the patio
and failing to post signage warning of the danger of stones and rocks, gravel,
etc. in the area, and by failing to maintain the area in  safe manner, and failing to regularly remove
the gravel, stones and rocks from the ATM patio and walkway.

            16.       Defendants, and each of them, were
otherwise negligent in their operation and maintenance of the area and their
failure to remove the gravel, stones and rocks which was readily foreseeable
would cause and create a hazardous condition on the walkway and ATM patio, and
were otherwise negligent in their operation and maintenance of the walkways and
patio areas near and in front of and adjacent to the Wells Fargo ATM
machine. 

            17.       Defendants, and each of them, acted in a
negligent and careless manner, thereby breaching their duty of due care owed to
the Plaintiffs herein. 

FIRST
CAUSE OF ACTION

(NEGLIGENCE)

            18.       Plaintiffs repeat and reallege each and
every foregoing paragraph set forth above and incorporate the same by reference
as though fully set forth at length herein.

            19.       On or about December 7, 2014, Plaintiff
Mary was lawfully on the Defendants’ premises located at 4014 South Rainbow
Boulevard, Las Vegas, Nevada, as a business customer.

            20.       Plaintiff Mary, while lawfully walking on
the premises to use the Defendants’ ATM, slipped and fell to the ground as a
result of loose gravel present on the walkway in front of the exterior ATM, and
was injured by the dangerous pre-existing condition on the premises, and by the
Defendants’ failure to properly and regularly maintain said walkways.

            21.       Upon information and belief, Defendants
had direct knowledge of the dangerous condition and failed to clean and/or
repair the dangerous condition. 

            22.       Defendants had a non-delegable duty to
supervise and maintain said premises in a reasonably safe and suitable condition
for its patrons, guests and invitees; and further to take any and all
reasonable precautions to avoid the presence of dangerous and/or artificial
conditions on or around said premises, particularly on the walkway in front of
the exterior ATM, which is open 24 hours per day, 7 days per week.

            23.       Upon information and belief, Defendants
employed maintenance personnel, management, subcontractors, and other
supervisory/security personnel for the purpose of supervising employees,
patrons, guests and invitees and maintaining said property, and the surrounding
areas, in a reasonably safe and suitable condition all of which property is
under said Defendants’ exclusive authority and control.

            24.       Defendants, despite having actual notice
or constructive notice that a dangerous condition existed on their premises,
and /or its agent(s) or a third party, as the case may be, over which said
Defendants had control and authority, failed to enact proper safeguards and
maintenance, and further failed to warn of said dangerous condition resulting
in serious bodily injury to Plaintiff Mary, all in breach of Defendants’ duty
of due care herein.

            25.       In addition to their direct liability,
Defendants, and each of them, were and are vicariously liable for the acts and
omissions of any staff, agents, apparent agents, servants, contractors,
employees or consultants, independent contractors, or singular persons or
entities, whether in house  or outside,
which in any manner caused or contributed to Plaintiff Mary’s irreparable harm
and damage.

            26.       As a direct and proximate result of said
negligence and/or reckless conduct herein, as the case may be, Plaintiff Mary,
an able-bodied female before the accident, has sustained damages in excess of
$10,000.00, including in the form of medical expenses, pain and suffering,
enjoyment of life and related damages, including, but not limited to, a broken
arm and broken leg.

SECOND CAUSE OF ACTION

(NEGLIGENT
HIRING; SUPERVISION AND FAILURE TO WARN)

            27.       Plaintiffs repeat and reallege each and
every foregoing paragraph set forth above and incorporate the same by reference
as though fully set forth at length herein.

            28.       While on said premises, Defendants, and
each of them, had a duty to supervise and maintain their premises and/or
perform improvements, and/or clean up the area of gravel, rocks and stones, in
a reasonably safe and suitable condition for their patrons, guests and
invitees; and further to take any and all reasonable precautions to avoid the
presence of dangerous and/or artificial conditions on or around said premises
as described herein.

            29.       Upon information and belief, Defendants
employed janitorial and maintenance personnel, as well as management and other
supervisory personnel for the purpose of supervising employees, patrons, guests
and invitees and maintaining said property in a reasonably safe and suitable
condition.

            30.       Said Defendants’ failure to warn of a
known dangerous condition, or to discover through exercise of reasonable
diligence under the circumstances that which could have been discovered, and
further failure to hire and adequately train and supervise suitable and fit
employees and/or agents to regularly maintain said property in a safe and
suitable manner has directly and proximately resulted in Plaintiff Mary’s damages
in an amount in excess of $10,000.00 subject to proof at trial.

            31.       Plaintiff Mary has been required to
engage the services of various medical providers to care for and treat her
injuries.  Plaintiff Mary is entitled to
reimbursement for past and future medical bills incurred as a result of the
injuries that have caused her pain and suffering.

            32.       Plaintiff Mary has, since the incident on
December 7, 2014, experienced pain and suffering, and will continue to endure
future pain and suffering all to her general damages in an amount in excess of
$10,000.00.

            33.       Plaintiffs have been required to retain
the services of a law firm to prosecute this action and are entitled to
reasonable attorneys’ fees.

THIRD CAUSE OF ACTION

(LOSS
OF CONSORTIUM)

 

            34.       Plaintiffs repeat and reallege each and
every foregoing paragraph set forth above and incorporate the same by reference
as though fully set forth at length herein.

            35.       As a direct and proximate result of the
accident described herein, Plaintiff Mary has suffered significant permanent
injuries that have substantially changed her lifestyle, and which injuries
include an incapacity and incapability to perform the types of jobs and other
duties and responsibilities she performed before the injury.

            36.       Plaintiff Andres is the husband of
Plaintiff Mary, and was legally and lawfully married to Plaintiff Mary at the
time of the accident, and is married to Plaintiff Mary at the present
time. 

            37.       As a direct and proximate result of the
injuries sustained by Plaintiff Mary in the accident described above, Plaintiff
Andres suffered the loss of love, care and consortium of his wife, Plaintiff
Mary, and, therefore, he is entitled to general damages for such losses.

            WHEREFORE,
Plaintiffs pray for judgment against the above-named Defendants, and each of
them, jointly and severally, as follows:

            1.         For compensatory damages for medical
costs and expenses, both past, present and future, in the amount to be proven
trial;

            2.         For general damages for past, present
and future pain and suffering, distress, loss of life activities, and other
damages to be shown at trial;

            3.         For past, present and future special
and general damages, as set forth above, including, but not limited to, bodily
injury, permanent disability and bodily impairment, past, present and future
medical expenses, loss of future wages, time and earning capacity, and
impairment and diminishment of future earning capacity, other out-of-pocket
expenses and consequential damages, physical pain and suffering, loss of enjoyment
of life, and an increased likelihood of re-injury, the exact amounts to be
proven at trial;

            4.         For general damages for loss of
consortium;

            5.         For pre-judgment and post-judgment
interest, reasonable attorneys’ fees, costs of court, and such other and
further relief that the Court may deem just and proper.

            DATED
this _____ day of April, 2015.

                                                                                    ALBRIGHT,
STODDARD, WARNICK

                                                                                    &
ALBRIGHT

 

                                                                                                                                                                                                                                                            By_________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 South Rancho Drive, Suite D-4

Las Vegas, Nevada 89106

(702) 384-7111

Attorneys
for Plaintiffs

Slip and Fall Accidents on Sidewalks and Parking Lots

  
  
  

slip and falljasonandbradley slipandfall

Nevada Slip-and-Fall Accidents – Sidewalks & Parking Lots

Slips and falls are a primary cause of injury in the U.S., leading
to around a million emergency room visits per year, according to the National
Floor Safety Institute (NFSI). Unfortunately, many of the slip-and-fall
accidents that end in emergency room visits happen in parking lots or on
sidewalks where they could have been prevented if the sidewalk or lot had been
properly designed and/or maintained.

When a slip or fall occurs on a parking lot or a sidewalk, the
owner of the property or the entity responsible for maintaining the space could
potentially be held liable for the fall and resulting injuries

How Do Slip-and-Fall Accidents Happen on Nevada Parking Lots and Sidewalks?

Slip-and-fall accidents can happen almost anywhere. They can also
occur for a variety of different reasons. However, some of the most common
risks that lead to slip-and-fall accidents in parking lots include:

  • Ice – Black ice can blend into the pavement and be difficult to detect.
  • Snow or sleet – Snow and sleet, even though rare in the Atlanta area, can create a tripping hazard of their own but can also worsen the risk of black ice. A thin layer of snow can cover up an icy surface below.
  • Spills – Oil and other slippery fluids can spill onto the surface of a parking lot, creating a slick patch that is a tripping or slipping hazard.
  • Debris – Items left in parking lots or on sidewalks in walking paths can create a tripping hazard, causing a fall risk.
  • Uneven surfaces – An uneven surface on a sidewalk or parking lot pavement can result in your foot’s not landing as expected, causing your center of gravity to shift and leading to a fall.
  • Irregular or loose surfaces – Gravel and other uneven or irregular faces can be more difficult to walk on and can create a danger.
  • Inadequate lighting – A dark or shadowy parking lot can be dangerous on its own or can exacerbate the other risk factors that exist, such as ice or sleet, since it can be difficult to see that these dangers exist in a dark space.

These are some of the most common reasons for slips and falls,
trips and falls, steps and falls and stump-and-fall accidents. These accidents
can happen anywhere, from parking lots at shopping centers, restaurants or
churches to sidewalks that line the streets of your neighborhood.

Who is Responsible for Slip-and-Fall Accidents on Nevada Parking Lots and Sidewalks?

When a slip-and-fall accident occurs on a parking lot or a
sidewalk, it could cause serious injuries, including bone fractures, brain
injuries or even death. The costs of treating the injuries may be expensive and
lead to more financial problems as a result of missing work. If your accident
was caused by someone else’s negligence or failure to exercise reasonable care,
then the person who failed you can be held liable and made to pay for the
damages (both economic and non-economic) that you incurred.

A number of potential individuals or entities could potentially be
held liable for slip-and-fall accidents in parking lots or sidewalks. The
potential defendants in a slip-and-fall lawsuit after you injure yourself in a
slip and fall accident include:

  • Owners of the commercial establishment that provided the parking lot – Store or restaurant owners (and others running a commercial business) are expected to protect their business guests by regularly inspecting their premises (including the parking lot). They should either fix any dangers on the premises or warn guests about them. If a store or restaurant owner allows a hazard, such as a dark parking lot or a sidewalk in disrepair, then the store / restaurant owner could be held liable.
  • Operators of the commercial establishment that provided the parking lot – If a store or restaurant owner is renting or leasing their business property, they can still be held liable for injuries that occur on that property even if it is owned by another person or entity. Liability in these cases will depend on who had control and responsibility for the lot.
  • Apartment complex owners – If you visit a friend at an apartment and injure yourself, it can be complicated to determine whether your friend or the landlord is responsible for compensating you. The general rule, however, is that if the injury happens in a common space such as a parking lot, the apartment complex owner or manager can be held liable for monetary damages.
        
  • Government entities responsible for sidewalk maintenance – If you get injured on a public sidewalk, you could potentially sue the government entity responsible for maintaining the sidewalk. However, the government often enjoys limited protection from suit in most states, so these types of cases tend to be more complex and follow a different course than standard cases.

These parties are not the only potential defendants in a parking
lot or sidewalk slip-and-fall case. Any person or entity who had a duty to
maintain the space or area and who failed in that duty in a way that led to
your injury could potentially be held responsible.

Proving Liability in an Nevada Parking Lot or Sidewalk Slip and Fall

When you are injured in a slip-and-fall accident on a parking lot
or a sidewalk, you can recover compensation for medical costs, lost wages, pain
and suffering and emotional distress in a personal injury lawsuit. However,
you’ll need to prove a few things in order to do so. For example, you’ll need
to prove:

  • The property owner had a responsibility to you to keep you safe.
  • The property owner failed to live up to his responsibility because he knew (or should have known) about the defect and didn’t correct it or warn you about it even though he had time to do so.
  • You were injured as a result of the failure of the property owner.
  • The danger was not “open and obvious,” which means you didn’t see the obvious hazard and choose to walk into it anyway.

 

Nevada Supreme Court Reaches Precedent Decision in Premises Liability Case


The Nevada Supreme Court published a landmark ruling dealing with premises liability on December 27, 2012. The Court, in Foster v. Costco, 128 Nev. Adv. Op. 71, 291 P.3d 150 (Nev. 2012)took a long look at the history of landownerliability in Nevada and held that the mere fact that a condition may be open and obvious does not automatically negate a landowner's duty of care to someone injured on his property by the allegedly open and obvious condition.  Defendants in Nevada premises cases have often moved for summary judgment (arguing that no genuine issues of material fact exist and so the case can be decided as a matter of law) in "open and obvious" cases. This will likely stop nearly completely with the Court's holding in Foster.In reaching its holding, the Court adopted the Third Restatement of Torts: Physical and Emotional Harm section 51 (2012):A land possessor owes a duty of reasonable care to entrants on the land with regard to:

  1. conduct by the land possessor that creates risks to entrants on the land;
  1. artificial conditions on the land that pose risks to entrants on the land;
  1. natural conditions on the land that pose risks to entrants on the land; and
  1. other risks to entrants on the land when any of the affirmative duties are applicable.

This duty is extended to all entrants on land, not just those invited. Landowners bear a general duty of reasonable care to all entrants, stated the Court, regardless of the open and obvious nature of dangerous conditions.

The duty must be analyzed with regard to foreseeability and gravity of harm, and the feasibility and availability of alternative conduct that would have prevented the harm.

In considering whether reasonable care was taken, the fact-finder must also take into account the surrounding circumstances, such as whether the landowner had reason to suspect that the entrant would proceed despite a known or obvious danger.

Separate from but related to the reasonable care assessment is consideration of the entrant's actions and whether he or she failed to exercise reasonable self-protection in encountering the danger.

Contact a Las Vegas, Nevada Sidewalk/Parking Lot Slip-and-Fall Lawyer Today

It can be difficult to prove liability in a slip-and-fall case
arising from an accident in a parking lot or on a sidewalk. At Albright
Stoddard, Warnick and Albright, we will help you every step of the way, from
choosing the right defendant to building solid evidence, and working with
expert witnesses. We can assist you by helping you to find engineers or other
expert witnesses, and by working with you to either negotiate a settlement or
prove your case in court if that becomes necessary. Our experience in handling
many such cases is that most Nevada defendants in premises liability cases are
unwilling to allow the plaintiff’s legal team to view any surveillance video
footage until after a lawsuit is filed and served.  Hence, it is becoming
more and more difficult to resolve these types of premises liability suits
without instituting litigation.

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on personal injury accidents. Call us at 702-384-7111.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services. Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Nevada Personal Injury Complaint: Hotel Bedboard Falls onto Plaintiff

  
  
  

sub banner personal

COMES NOW, Plaintiff, MICHAEl _____, an individual (hereinafter "Plaintiff"), by and through his attorneys of record, ALBRIGHT, STODDARD, WARNICK & WARNICK, and as and for his Complaint against Defendants, HRHH HOTEL/CASINO, LLC, a Foreign limited liability company; LVHR CASINO, LLC, a Nevada limited liability company, dba HARD ROCK HOTEL & CASINO; and HARD ROCK HOTEL HOLDINGS, LLC(hereinafter "Defendants"), DOES I through X, and ROE CORPORATIONS I through XX, inclusive, allege and aver as follows:

JURISDICTION

At all times mentioned herein, the Plaintiff was and is a resident of Los Angeles, California.

Upon information and belief, at all times mentioned herein, Defendant, HRHH HOTEL/CASINO, LLC, a Foreign limited liability company, is a corporation duly organized under the laws

of the State of Nevada, and authorized to conduct business in the State of Nevada

Upon information and belief, at all times mentioned herein, Defendant, LVHR CASINO, LLC, a Nevada limited liability company, doing business as HARD ROCK HOTEL & CASINO, is duly organized under the laws of the State of Nevada, and authorized to conduct business in the State of Nevada

Upon information and belief, at all times mentioned herein, Defendant, HARD ROCK HOTEL HOLDINGS LLC, a Foreign limited liability corporation, is a corporation duly organized under the laws of the State of Nevada, and authorized to conduct business in the State of Nevada

The true names and capacities, whether individual, corporate, associate or otherwise, of Defendants DOES I through X and/or ROE CORPORATIONS I through XX, inclusive, are unknown to Plaintiff, who therefore sue said Defendants by such fictitious names.  The Plaintiff is informed, believe and thereupon allege that the Defendants designated herein as DOES I through X and/or ROE CORPORATIONS I through XX, inclusive, are any one of the following:

(a) Parties responsible in some manner for the events and happenings herein referred to that caused injuries and damages proximately thereby to the Plaintiff as herein alleged;

(b) Parties that are the agents, servants, employees and/or contractors of the Defendants, each of them acting within the course and scope of their agency, employment or contract;

(c) Parties that own, lease, manage, operate, secure and/or are responsible for the premises referred to hereinafter; and/or

(d) Parties that have assumed or retained the liabilities of any of the Defendants by virtue of an agreement, sale, transfer or otherwise.

The Plaintiff will ask leave of the Court to amend this Complaint to insert the true names and capacities of said Defendants, DOES I-X and ROE CORPORATIONS I-XX, inclusive, when the same have been ascertained by the Plaintiff, together with appropriate charging allegations, and to join said Defendants in the action.

The acts and omissions alleged hereafter occurred within Clark County, State of Nevada.

GENERAL ALLEGATIONS

Plaintiff repeats and realleges each and every foregoing paragraph set forth above and incorporate the same by reference as though fully set forth at length herein.

At all times mentioned herein, particularly on or about April 7, 2013, the Defendants owned, operated, possessed, controlled and/or maintained the property located at 4455 Paradise Rd, Las Vegas, Nevada  89169, commonly known as the Hard Rock Hotel & Casino (hereinafter the "Hard Rock").

On or about April 7, 2013, Plaintiff was lawfully on the premises of the Hard Rock.

During the early evening of April 7, 2013, Plaintiff was lying in bed in his hotel room at the Hard Rock, when the headboard suddenly, unexpectedly and without warning, fell on the Plaintiff.

Plaintiff’s injuries included a cracked skull, resulting in a concussion, spinal compression in the neck and back, and shoulder injuries.

The injuries sustained by Plaintiff  required immediate emergency medical attention.

Plaintiff  was transported via ambulance from the Hard Rock to Sunrise Hospital, where he received treatment for his injuries, including staples in his head would.

Plaintiff has required shoulder surgery and treatment by a chiropractor as a result of his multiple injuries.

As a result of Plaintiff’s injuries, he has sustained damages in excess of $10,000.00, and has been severely restricted in his professional services as a Hollywood camera man.

Plaintiff has been required to retain the services of a law firm to prosecute this action and is entitled to reasonable attorneys’ fees.

FIRST CAUSE OF ACTION

(  NEGLIGENCE )

Plaintiff repeats and realleges each and every foregoing paragraph set forth above and incorporates the same by reference as though fully set forth at length herein.

Defendants owed Plaintiff a duty to maintain the premises in a reasonably safe condition for use, or in the alternative, to warn Plaintiff of any unsafe conditions.

Defendants, including their agents and/or employees, negligently created and/or allowed an unreasonably dangerous condition to exist and further created an unreasonable risk of harm to Plaintiff, as well as the general public.

Defendants negligently failed to warn Plaintiff of the unreasonably dangerous condition on its premises.

Defendants negligently supervised their agents and/or employees responsible for designing, inspecting and/or maintaining the premises.

Defendants owed Plaintiff a duty of care in designing, selecting, purchasing, installing, affixing and securing the headboard in the hotel room in the casino, and in selecting those charged with the task of maintaining and inspecting the same.

Defendants’ improper design and/or maintenance of the headboard and the manner of its attachment to the wall, was the proximate cause of Plaintiff’s injuries.

As a direct and proximate result of the negligence and carelessness of the Defendants, Plaintiff has suffered severe and serious personal injuries.

The full nature and extent of Plaintiff’s injuries are still unknown and when the same are ascertained, Plaintiff will assert them with particularity.

As a direct and proximate result of Defendants’ breaches, and each of them, Plaintiff was seriously injured and caused to suffer great pain of body and mind, some of which is permanent and disabling, all to his general damages in an amount in excess of Ten Thousand Dollars ($10,000.00).

As a further direct and proximate result, Plaintiff incurred expenses for medical care, shoulder surgery and treatment, and will incur expenses for medical care and treatment in the future in an amount to be proven at trial.  

As a further direct and proximate result of the foregoing, Plaintiff has been required to engage the services of various medical providers, including obtaining emergency medical attention and surgery, and will continue to receive care in the future.

Plaintiff is entitled to reimbursement for past and future medical bills incurred as a result of the injuries that have caused Plaintiff’s pain and suffering.

Plaintiff has, since the incident on April 7, 2013, experienced pain and suffering in his shoulder, back and neck, and will continue to endure future pain and suffering all to his general damages in an amount in excess of $10,000.00, together with lost wages due to his inability to carry and hold heavy camera equipment in the manner to which he was accustomed.

Plaintiff has been forced to retain the services of an attorney for this action, and as such is entitled to reasonable attorneys’ fees and litigation costs.

SECOND CAUSE OF ACTION

(NEGLIGENCE via RES IPSA LOQUITUR)

Plaintiff repeats and realleges each and every foregoing paragraph set forth above and incorporates the same by reference as though fully set forth at length herein.

The Defendants owed Plaintiff a duty to exercise due care in providing a safe place for patrons of Hard Rock, and failed to meet this duty, and said actions and omissions as described above, were a breach of the Defendants’ duty of care.

Getting hit in the head, back and shoulders by a heavy headboard while lying in bed does not normally occur in the absence of someone’s negligence.

The Defendants held the exclusive control of the headboard which fell upon Plaintiff while lying in his bed in his Hard Rock hotel room.

Plaintiff did nothing to cause the headboard to fall off the wall and fall upon him, causing him numerous and extensive injuries.

As a direct and proximate result of the foregoing negligence and carelessness of the Defendants, Plaintiff has suffered severe and serious personal injuries, and the Defendants are liable for the same under the doctrine of res ipsa loquitur.  The full nature and extent of Plaintiff’s injuries are still unknown and when the same are ascertained with more particularity, Plaintiff will assert them with particularity.

Plaintiff has been required to engage the services of various medical providers, including emergency medical attention, both in the Nevada and in California, where he resides, to care for and treat his injuries.  Plaintiff is entitled to reimbursement for past and future medical bills incurred as a result of the injuries that have caused their pain and suffering, as well as lost income since he is no longer able to work as he did previously holding and carrying heavy photographic equipment.

Plaintiff has, since the incident on April 7, 2013, experienced pain and suffering in his shoulder, back and neck, and will continue to endure future pain and suffering all to his general damages in an amount in excess of $10,000.00.

Plaintiff has been forced to retain the services of an attorney for this action, and as such is entitled to reasonable attorneys’ fees and litigation costs.

WHEREFORE, Plaintiff prays for relief and judgment against the Defendants as follows:

A. General damages in an amount in excess of Ten Thousand Dollars ($10,000.00);

B. Medical and incidental expenses incurred and to be incurred;

C. Lost wages and lost employment earnings and profits;

D. Costs of suit, pre-judgment interest, post-judgment interest, attorneys fees; and

E. For such other relief as is just and proper.

DATED this _____day of March, 2015.

 

ALBRIGHT, STODDARD, WARNICK & ALBRIGHT

 

 

 

____________________________________________

G. MARK ALBRIGHT, ESQ.

Nevada Bar No. 001394

WILLIAM H. STODDARD, JR., ESQ.

Nevada Bar No. 008679

801 South Rancho Drive, Suite D-4

Las Vegas, Nevada 89106

(702) 384-7111

Attorneys for Plaintiff

 

gma@albrightstoddard.com

 

 

Notice of Related Cases in Nevada Federal Courts and Oppositions Thereto

  
  
  

 The Nevada Federal Courts in 2011 adopted a new rule relating to the notification to the court of related cases. Under LR 7-2.1, a case is “related” if (a) both actions involve the same
parties and are based on the same or similar claims; (b) both actions involve
the same property, transaction, or event; (c) both actions involve similar
questions of fact and the same question of law such that their assignment to
the same judge would result in judicial efficiency; or (d) if the cases would
“entail substantial duplication of labor” if the cases were heard by different
judges.

Counsel who believes that an action may be related to another action is
now required to file a “Notice of Related Cases” with the court. The notice
must set forth the title and number of each possibly related case, together
with a brief statement of why they are related. No specific deadline is set
forth with respect to any opposition or response to the notice.  Hence counsel should file any oppositions uickly before the assigned judge rules, explaining why he won’t be duplicating
the time and labor invested by a prior judge in the cases purported to be related. 

A Sample Opposition to Notice of Related Cases would be as follows:

G. Mark Albright

Nevada Bar No. 1394

Albright, Stoddard, Warnick and Albright

801 S Rancho Dr D4

Las Vegas, NV 89106

(702) 384-7111

Email: 
gma@albrightstoddard.com

 

Attorneys
for Plaintiff

 

See Signature Page for Additional Counsel

 

UNITED
STATES DISTRICT COURT

FOR THE
DISTRICT OF NEVADA

 

 

      

W. A. SOKOLOWSKI,           

                                    Plaintiff,         

                                                                                           

                                    v.

 

STEPHEN A. WYNN; et al

            

 

 

 

 

            Civil
  No.

2:15-cv-536 (RFB) (NJK)

 

 

 

 

 

 

PLAINTIFF’S OPPOSITION TO NOTICE OF RELATED CASES

 

Plaintiff, by his
undersigned counsel, hereby files this opposition to Defendants’ Notice of
Related Cases filed March 26, 2015(“Notice”) (Document #5).

BOTH “RELATED”
CASES HAVE BEEN TERMINATED MORE THAN ONE YEAR AND ONLY TANGENTIALLY “RELATED”
TO THIS CASE

 

For reasons that
are suspect and may simply be intra-District forum-shopping, Defendants seek to
have this case re-assigned as related to two, now-terminated actions that had
been pending before the Hon. James C. Mahan. The two actions, referred to by Defendants
as the LMPERS and Okada Actions, have been terminated, the former by more than
a year and the latter by more than two years.

In LMPERS, a
shareholder derivative suit against the then-members of the Board of Directors
of Wynn Resorts, Ltd. (“Wynn” or the “Company”), there were absolutely no
proceedings on the merits before Judge Mahan dismissed the action due to the
Plaintiffs’ failure to make a pre-suit demand upon Wynn’s Board as required by
Rule 23.1, Fed. R. Civ. P. or provide sufficient justification for their
failure to do so.  The Okada Action was
dismissed more than two years ago, less than six weeks after it was commenced.
Plaintiff therein, a former director of the Company, filed a motion for a
preliminary injunction which was quickly denied by Judge Mahan at a hearing
lasting

1 hour and 10 minutes on February
15, 2013, despite Defendants’ representation that “Judge Mahan heard extensive oral argument” [emphasis
added]. On March 4, 2013, Plaintiff Okada voluntarily dismissed his action.

As discussed
below, although both of these cases have tangential factual relationships to
this litigation, neither is sufficiently “related” to come within the letter
and spirit of Local Rule 7-2.1.

THE CASES ARE NOT
“RELATED” AS CONTEMPLATED

BY THE RULE

 

While it must be
acknowledged that there are some factual allegations and parties in common
among the three cases, they certainly are not related as contemplated by the
Rule. Indeed, the purpose of the Rule is to avoid having a new judge assigned
to a “related” case having to re-learn what the previous judge had already
learned. Here, there is virtually nothing in the Notice filed by Defendants
that demonstrates that Judge Mahan had any significant accumulated knowledge
that would assist him in presiding over the newly-commenced case which is based
on Defendants’ violations of law that took place within the past two weeks;
i.e. the Proxy Statement having been issued and disseminated to Plaintiff and
other Wynn shareholders on March 14, 2015 in connection with the Company’s
annual meeting of shareholders to be held April 24, 2015 (the “Proxy
Statement”).

Although the
Complaint cites historical wrongdoing committed by the Defendants in connection
with possible violations of the Foreign Corrupt Practices Act (“FCPA”) and in
connection with the acknowledged “pact with the devil” Wynn’s Board made with
Mr. Okada before determining that he was “unsuitable” as a director, these are
simply historical references.[1]
Unlike in LMPERS, these issues are referred to in the Complaint in this action
solely in the context of setting forth material facts omitted from Wynn’s
current Proxy Statement issued and disseminated by the Defendants in the
Company’s name on March 14, 2015 in the Proxy Statement.[2]

While the
Complaint certainly refers to the FCPA and Okada issues in a historical
context, the Plaintiff’s entire focus is the newly-issued Proxy Statement,
where he claims other current or historical material facts that were also
omitted therefrom. These omitted material facts include disclosure of an
ongoing money-laundering scandal (including violations of the federal Bank
Secrecy Act) and attendant, ongoing FBI, DEA and SEC investigations which
Plaintiff alleges are being not only “covered-up” by Defendants but
specifically omitted from disclosure in the Proxy Statement.   

There are
additional issues raised by Plaintiff that were not raised in either the Okada
or LMPERS Actions: an ongoing proxy fight that resulted from the efforts of  members of the Board to replace Elaine P. Wynn
as a director of the Company (about whom the Proxy Statement omits material
facts and misrepresents others), the ratification of the Audit Committee’s
selection of the Company’s long-time auditor, Ernst & Young, LLP and a
shareholder proposal seeking greater transparency with regard to Wynn’s direct
and indirect political contributions. Collectively, these three issues,
together with the money-laundering, Okada and FCPA issues, are raised by
Plaintiff in his Complaint not for their historical existence or to seek
recourse for such wrongdoing but, rather, as concrete examples of the
Defendants’ violations of the disclosure requirements of §14(a) of the
Securities Exchange Act and Rule 14a-9 promulgated thereunder by the SEC by their
omission of material facts from the Proxy Statement.

CONCLUSION

While there can be
no doubt that there are some historical facts alleged in the current Complaint
that overlap with those in the now-terminated LMPERS and Okada cases where
Judge Mahan had no merits involvement in the former and minimal in the latter,
the entire focus of this case is whether the recently-issued Proxy Statement
complies with federal disclosure law and rules and what action should be taken
by the Court if it concludes that it does not.

Accordingly,
Plaintiff respectfully asks that his case not be re-assigned.

 

 

 

 

 

 

 

                                                ALBRIGHT,
STODDARD, WARNICK

  
AND ALBRIGHT

 

 

                                                                                                                                   

G. Mark Albright

Nevada Bar No. 1394____

801 S Rancho Dr D4,

Las Vegas, NV 89106

(702) 384-7111

 

Email:  gma@albrightstoddard.com

 

GREENFIELD
& GOODMAN, LLC

Richard
D. Greenfield

250
Hudson Street, 8th Floor

New
York, NY  10013

(917) 495-4446

whitehatrdg@earthlink.net

 

 

 

 

Counsel for
Plaintiff

 

 



[1] While
there may well be recourse to the Company for the Board’s misconduct, as
alleged in the LMPERS Action, that is not such a case, where there are no
derivative claims pending that have been brought on Wynn’s behalf.

[2]
Inexplicably, although, as alleged in the Complaint, the Proxy Statement was
issued and disseminated by Defendants in the name of the Company, a passive
actor, they seem to complain that Wynn is not a named defendant.

 

 

Private Shareholder Action Under Exchange Act 14(a) and SEC Rule 14a

  
  
  

G. Mark Albright

Nevada Bar No. 1394

Albright, Stoddard, Warnick and Albright

801 S Rancho Dr D4

Las Vegas, NV 89106

Phone: (702) 384-7111

Fax: (702) 384-0605

Email:

gma@albrightstoddard.com

Attorneys

for Plaintiff


See Signature Page for Additional Counsel

UNITED

STATES DISTRICT COURT


FOR THE

DISTRICT OF NEVADA

W. A.

  SOKOLOWSKI,
Plaintiff, v. STEPHEN
  A.

  WYNN;
JOHN J.

  HAGENBUCH;
RAY R.

  IRANI;
ROBERT J.

  MILLER;
ALVIN V.

  SHOEMAKER;
J. EDWARD

  VIRTUE
; and D. BOONE

  WAYSON
Defendants, -

Civil

  No. COMPLAINT JURY

  DEMAND

 

2:15-cv-00536-RFB-NJK









COMPLAINT



I. JURISDICTION AND VENUE

1.

This Court has jurisdiction pursuant to (a) 28 U.S.C. §1331 because Count I

asserts claims for violations of § 14(a) of the Exchange Act and SEC

Rule 14a-9; (b) diversity jurisdiction under 28 U.S.C. § 1332(a)(2) , as

Plaintiff and each of the Defendants are citizens of different states, and the
value of the relief

requested exceeds $75,000,

exclusive of interest and costs; and (c) the Court’s supplemental jurisdiction

over the common law claims pursuant to 28 U.S.C. § 1367(a).

2.

This Court has

jurisdiction over each Defendant because each either is an individual with

sufficient minimum contacts with this District.

3.

Venue is proper in this District pursuant to

28 U.S.C. §§ 1391(a)(2) and (3) and § 1401 because some or all of the events,

actions, and failures to act giving rise to the claims asserted herein occurred

or were initiated in this District.

II. NATURE OF

ACTION AND SUMMARY OF CLAIMS

4.

This is a shareholder’s action brought by

Plaintiff in his capacity as a current shareholder of Wynn Resorts, Limited

(“Wynn” or the “Company) on March 5, 2015, the record date for shareholders for

the Company’s 2015 Annual Meeting. No claims are asserted herein derivatively

on behalf of Wynn or against the Company in whose name the Defendants caused it

to issue and disseminate its Proxy Statement dated March 14, 2015 in connection

with its forthcoming Annual Meeting of Shareholders scheduled for April 24,

2015 (the “Proxy Statement”).

5.

Each of the Defendants, Messrs. Wynn, Irani,

Virtue, Hagenbuch, Miller, Shoemaker and

Wayson, is presently serving

on the Company’s Board of Directors (“Board”), and collectively and individually
initiated or

actively participated in a course of conduct that was designed to, and did, in

connection with the content of the Proxy Statement and/or otherwise:

(a) Conceal the fact that the

Company’s management was and is improperly misrepresenting and historically had

misrepresented Wynn’s internal controls in order to allow a widespread scheme

of bribery, money laundering and other wrongful behavior in violation of

applicable federal and other laws and, thereafter through the present, cover-up

such wrongdoing;

(b) Deceive the shareholders of Wynn

regarding the Defendants’ oversight of the management of the Company’s

operations;

(c) Concealed the fact that the

Company had failed to comply with the books and records, and internal controls

provisions of the Foreign Corrupt Practices Act (the “FCPA") and the Bank

Secrecy Act as well as conceal such violations of law ;

(d) Conceal material facts with

respect to audits of the Company’s year-end financial statements performed by
Ernst

& Young, LLP (“E&Y”) including, inter

alia,
that such audits and the reports thereupon were not prepared in

accordance with the standards of the Public Company Accounting Oversight Board

(United States) a.k.a.Generally Accepted Auditing Standards (“GAAS”) ,;

(e) Conceal the fact that the

Defendants are causing waste of the Company’s assets by means of, inter alia,
causing a committee of the

Board and counsel to it to commence a purported investigation of possible

violations of the FCPA and other violations of law as alleged in a letter sent

on behalf of a Wynn shareholder to the Board on December 18, 2014 (the “Demand

Letter”) without any benefit flowing to the Company. Such sham investigation is

being carried out solely to protect the Defendants and others from personal

liability for their long-continuing wrongdoing and the harm it has caused the

Company. Neither the Board nor the committee has validly exercised its business

judgment in commissioning such sham investigation, which has been put in the

hands of Potter, Anderson & Corroon (“PAC”), a Delaware law firm which has

a history of generating “whitewash” reports regarding claims of corporate

wrongdoing and which has a bias against any claims alleged by principal counsel

for Plaintiff and the shareholder on whose behalf the Demand Letter was sent.[1] Moreover, evidencing the sham
nature of the

foregoing proceeding, is the fact that the Board has already sought and

obtained the dismissal of many of the claims alleged by various Wynn
shareholders

in derivative litigation.

(i) Conceal the fact that the

Defendants have disregarded and/or intentionally breached the Company’s “Code
of

Business Ethics” (the “Code”), which was first adopted on May 4, 2004. as well
as other written policies governing

their conduct;

(j) Enhance the Defendants'

positions as directors and/or officers of Wynn while providing each of them

with substantial compensation, power, and prestige;

(k) Conceal the fact that the

Defendants and senior officers of the Company have given away, directly and

indirectly through Wynn’s political action committee and otherwise at least

$1.8 million in Wynn’s corporate funds in 2014 and many millions of dollars in

previous years to, inter alia,

politicians and/or their campaigns, much of it for the personal benefit of

officers and directors of the Company without any concomitant benefit to the

Company; and

(l) Conceal and misrepresent the

reasons why the Board has not nominated Elaine P. Wynn (“Ms. Wynn”), a major
shareholder of the

Company, for re-election to the Board.

6.

At material times, while serving as Wynn’s purportedly independent public

accounting firm (i.e. auditor), E&Y failed to provide to the Company
the independent auditing services it was well-compensated to

provide, negligently or otherwise failed to conduct audits of the Company’s

financial statements in accordance with Generally Accepted Auditing Standards

(“GAAS”) as E&Y was engaged to do, and issued false and misleading “clean”

opinion letters as to the Company’s year-end financial statements.

7.

This action charges the Defendants with

directly participating in and/or aiding and abetting violations of §14 (a) of

the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 14a-9 thereunder

as well as breaching their common law duty of candor owed to Plaintiff and

other Wynn shareholders. Plaintiff seeks, inter alia, a

determination that the Proxy Statement as issued and disseminated to Plaintiff

and other Wynn shareholders warrants replacement with one in full compliance

with applicable law and an Order negating the shareholder votes to be taken at

the Company’s 2015 Annual Meeting pursuant to the proxies solicited by

Defendants by the Proxy Statement and related materials.

8.

The allegations in this Complaint are based upon personal knowledge as to

Plaintiff and his ownership of shares of Wynn, and on information and belief as

to all other matters, such information and belief having been informed by the

investigation conducted by and under the supervision of his counsel, which

included, among other things: (a) review and analysis of the Company’s public

filings with the SEC; (b) review of its 2011-2015 Proxy Statements; (c) review

of other publicly available information, including articles in the news media;

(d) review of the Company’s website and press releases; (e) consultation with

persons knowledgeable regarding the facts and circumstances alleged

herein; (f) review of filings in

shareholder derivative Complaints and related materials

in litigations commenced against some or all of the Defendants;

(g) review of preliminary and final proxy solicitation materials prepared on

behalf of the Defendants and Ms. Wynn; and

(h) review of filings with the Federal Election Commission

III. PARTIES AND NON-PARTY WYNN

9.

Plaintiff W.A. Sokolowski owns and has

continuously owned common stock of Wynn during the period of the wrongdoing

alleged herein and on March 5, 2015.

Plaintiff is a citizen of New Jersey.

10.

Wynn, itself, is not a defendant herein and no

claims are asserted against it. It is, for the purposes of this litigation,

entirely passive since the Proxy Statement was caused to be issued and

disseminated in its name by the Defendants. It owns and operates integrated

resort properties featuring gaming, retail, convention, and exhibition

facilities in Asia and the United States, including within the Macao Special

Administrative Region of the People's Republic of China and within this

District. In Las Vegas, Nevada

11.

Defendant Stephen A. Wynn (“Mr. Wynn”) has been the Company's Chief Executive
Officer ("CEO"),

and Chairman of the Board ("Chairman"). He has

dominated and controlled the Board, hand-selecting those who serve on the Board

and determining the remuneration they receive. In

fact, no member of the Company’s Board

is independent or free from Mr. Wynn’s de

facto
control or influence. Indeed, no one would be nominated to join the

Company’s Board without his specific direction or approval. Mr. Wynn

consciously and purposely has engaged in a

course of conduct that has exposed and continues to expose the Company to

potential fines and sanctions and severe scrutiny by federal, state and certain

foreign regulators and law enforcement authorities. The Board continuously has

submitted to Mr. Wynn's wishes and provided him with various perquisites and

emoluments which are purportedly charged to him at fair market value such as,

e.g., a villa on the Company’s property in Las Vegas.[2]

12.

Defendants Irani,

Virtue, Hagenbuch, Miller, Shoemaker and

Wayson, are presently serving

on the Board, together with Ms. Wynn, whom they have not nominated for
re-election. Upon information and belief, each of such Defendants as well as

Mr. Wynn, is a citizen of states other than New Jersey. Messrs. Hagenbuch and

Virtue are the Board’s nominees for re-election as directors of the Company.

13.

At all relevant times, each of the Defendants,

because of their positions as directors of Wynn, had access to adverse,

non-public information about the Company’s financial condition and operations

and the investigations thereof, including the wrongdoing alleged herein.

14.

Each of the Defendants, because of their

positions of control and authority as Chief Executive Officer (in the case of

Mr. Wynn) and directors of the Company, directly and/or indirectly, exercised

control over the contents of the various public statements issued by the

Company, including the Proxy Statement, which was issued and disseminated by

them and in their name.

15.

Each member of the Board knew

that operating in Macao involved a higher than normal risk of violating
American

and Chinese anti-corruption laws. Nevertheless,

in the face of such specific knowledge, the Defendants breached their fiduciary

duties by failing to implement or maintain adequate internal controls and

accounting systems to prevent violations of the FCPA as well as Nevada gaming

regulations and/or to require the Company’s management to do so. Thus, each of

them knowingly, recklessly, and/or with gross negligence caused the Company to

violate the FCPA as well as the Bank Secrecy Act in order to generate business.

In the case of the Defendants other than Mr. Wynn, they participated and/or

acquiesced in such conduct to maintain his favor and keep their positions as

Directors of the Company and all of the substantial personal benefits that

inured to them as a result.

16.

Indeed, in Wynn Resorts, Limited v. Okada, Case

No. 2:12-cv-00400 (D. Nev.),

in a Counterclaim asserted by the Company’s then largest shareholder, it is

claimed that: "Mr. Wynn, has run Wynn Resorts as a personal fiefdom,
packing the Board with friends who do his

personal

bidding,

and

paying

key

executives exorbitant amounts

for their unwavering fealty."

17.

Although it appears that the

very costly FCPA investigations of the Company have either been suspended or

terminated, there are ongoing anti-corruption investigations conducted by the

Chinese government that are likely to impact upon Wynn’s operations in Macau.

In addition, there are ongoing investigations by the FBI relating to the

Company’s violations of, inter alia,

the Bank Secrecy Act.

18.

The Defendants were well-informed about

and/or actively participated in the wrongdoing alleged herein, particularly the

acquiescence in illegal money laundering activities at the Company’s casinos,

failure to implement and maintain adequate internal controls as well as

deception of the investing public and federal and state regulators. They

abdicated their respective stewardship responsibilities to the Company by

acquiescing and/or participating in the wrongdoing alleged herein and by

placing their loyalty to Mr. Wynn above their loyalty to the Company.

IV. SUBSTANTIVE ALLEGATIONS

A.

The Demand Letter

19.

The Demand Letter sent to the

Board on behalf of a Wynn shareholder demanded

that the Board cause the Company to sue Mr. Wynn, the members

of the Board, the Company’s officers, other executives, auditors and legal

counsel involved in, among other wrongdoing, the Company’s direct and indirect

money laundering, payment of bribes and otherwise violating the reporting

requirements of the FCPA, the Board’s relationship with former director Kazuo
Okada (Mr.

Okada”) and/or engaging in other wrongful conduct.

20.

The Demand Letter accused the members of the Board

with acquiescing in and/or covering up the specified wrongful conduct, causing

it and/or sitting idly by while the Company concealed its likely exposure in

the wake of such conduct. It also claimed that the Board accepted the funds and
highly

questionable contacts of former Wynn director (since October 21,

2002),

Mr. Okada, when each member of the Board knew or should have known that he was

“unsuitable” to be either a director of the Company or a shareholder. Mr. Okada
had made much of his fortune manufacturing

gaming machines for Japan’s notorious pachinko parlors — and who was apparently

well-acquainted with the underside of the mushrooming Asian gambling industry.

Red warning flags were highly visible to each member of the Board as to Mr.

Okada and his well-known propensity for impropriety. Nevertheless, Mr. Wynn and

each member of the Board was willing to make a “pact with the devil” to obtain

his financing and contacts and, thereafter, let him remain a shareholder and

director once his egregious conduct became known.

21.

The claims set forth in the Demand Letter are

purportedly being investigated by a “committee” of unidentified members of the

Board. However, despite such representations, whatever

“investigation” is being carried out is being performed by PAC consistent with

what appears to be its ultimate goal, i.e., to “whitewash” the wrongful conduct

as alleged in the Demand Letter.

22.

By aiding and abetting the

Board’s waste of Wynn’s assets, and likely collecting millions of dollars of

the Company’s money, PAC is acting consistent with the Board’s successful

attempt to have dismissed previously alleged and pending claims by Wynn

shareholders. Indeed, to carry out their solely personal objectives, the Board
has

given PAC “carte blanche” and an open checkbook in order to develop a defensive

strategy vis-à-vis the claims set

forth in the Demand Letter.

23.

Moreover, PAC explicitly

refused to answer questions addressing the bona

fides
of its actions and those of the “committee” of the Board it purports

to represent. In particular, it refused to identify the members of such

“committee” or provide the Board’s resolution appointing it to consider the

Demand Letter.[3] In particular, PAC would
not answer a single one of the questions

that would establish,
inter alia, whether it was solicited by

Wynn’s General Counsel or some other lawyer (as distinct from the “committee”),

when it was contacted and whether it and/or “committee” members had conflicts

of interest that would demonstrate their bias and interestedness.

B. Macau

24.

In 2006, Wynn Resorts opened a hotel in Macau under a land

concession agreement granted by the Macau government, with a term running from



2002 to 2022. In February 2006, the Company announced that it had submitted an

application to the Macau government for a second land concession agreement to

build a new casino resort.

25.

After five years, the second land concession agreement had still

not been approved. In May 2011, at Mr. Wynn’s instigation, the Board, with the

exception of Mr. Okada, approved a $135 million “donation” to the University of

Macau Development Foundation (“Development Foundation”). The Macau “donation,”

was essentially an indirect bribe to the Chancellor of the Development

Foundation who was, coincidentally, head of the Macau government.

26.

The “donation” consisted of a $25 million charitable transfer made

in 2011, and a commitment to make additional transfers of $10 million per year

for each of the calendar years between 2012 and 2022. The Macau “donation,” the
largest in the

history of the University, represented an illegal or otherwise improper attempt

to influence the Macau government to expedite approval of the second land

concession agreement. There was no legitimate business purpose for the

“donation” which, if not a bribe, was a waste of Wynn’s corporate assets for

which it got nothing in return.

27.

Moreover, the “donation” contravenes the Company’s stated policies

including, inter alia, the Code, which defines itself as

“a statement of policies for the individual and business conduct of the

Company’s employees and Directors….” The Code specifically addressed conduct

such as the “donation” when it stated:

“Prohibition on Gifts to Government Officials
and Employees…You

are prohibited from providing gifts, meals or anything of value to government

officials or employees or members of their families in connection with Company

business without prior written approval from the Compliance Officer…

Bribery of Government Officials The Company’s

Policy Regarding Payments to Foreign Officials, the [FCPA], and the laws of

many other countries prohibit the Company and its officers, employees and

agents from giving or offering to give money or anything of value to a foreign

official, a foreign political party, a party official or a candidate for

political office in order to influence official acts or decisions of that

person or entity, to obtain or retain business, or to secure any improper

advantage.”

28.

Some time prior to February 8,

2012, the Securities and Exchange Commission (the “SEC”), in response to

information that had been provided to it, and based upon a belief that the

Macau “donation” was a bribe and that the Company had not properly accounted

for it or made appropriate disclosures, commenced an informal investigation.

The SEC thereafter informed the Company that it had commenced an informal

inquiry into the Macau “donation.”

29.

Ultimately, based upon the

information and documents at its disposal, in 2013, the SEC informed the

Company that it had concluded its investigation. In an 8-K Report with the SEC,
Wynn

informed shareholders that the investigation had concluded. In particular, you

caused the Company to state in its filing:

“On July 2, the company received a

letter from the (commission) stating that the investigation had been completed

with the (SEC) not intending to recommend any enforcement action against the

company by the SEC.”

23. Speaking to The Associated Press from his yacht off

the Spanish island of Ibiza following the SEC filing, Mr. Wynn said he never

had any doubt federal investigators would “clear” the Company. He is quoted as

saying:

“We were so sanguine that we never paid

any attention to it; we had no exposure. It was a nonevent except for the damn

newspapers.”

30.

Consistent with its

unimpressive history of oversight (it encourages Nevada casinos to

self-police), in February 2013, based on the facts and documents that were made

available to it, the Nevada State Gaming Control Board (“NGCB”) purportedly

investigated the Macau “donation” and found no violations of its rules and

regulations.

31.

While the Company had, so far,

escaped liability under the FCPA or that might be imposed by Chinese

authorities as a result of the $135 million “contribution, following the

foregoing NGCB decision, in early April, 2013, Mr. Okada sent a letter setting

forth the Board’s personal responsibility for the “contribution.” The letter
states, under the heading “Suspicious $135 million donation to

the University of Macau Development

Foundation” as follows.

“In April 2011, the Board met, discussed, and
approved

a pledge by Wynn Macau, Limited (“Wynn Macau”), a subsidiary of the Company, to

donate HK$1 billion (roughly $135 million) to the University of Macau

Development Foundation, at a time when Wynn Macau was seeking local government

approval to develop a third casino. This donation is suspicious for a

number of reasons, including its enormous size, the fact that the 10-year term

of the pledge matches precisely the length of the casino license Wynn Resorts

was seeking, and the fact that the lead trustee of the University of Macau

Development Foundation also has a position in the Macau government which

enables him to influence the issuance of gaming licenses. Mr.

Okada questioned and objected to the donation and was ultimately the sole

director to vote against it. Mr. Okada has noted that ‘I am at a

complete loss as to the business justification for the donation, other than
that

it was an attempt to curry favor with those that have ultimate authority for

issuing gaming licenses.’ Following the April 2011 board meeting,

pursuant to his rights as a director of the Company and in furtherance of his

fiduciary duties to stockholders of the Company, Mr. Okada, sought to further

investigate the Wynn Macau donation and requested additional information from

Wynn Resorts concerning the donation and related matters. When the

Company refused to provide the information, Mr. Okada took legal action

and was vindicated by a court order requiring Wynn Resorts to comply with Mr.

Okada’s reasonable requests. As Mr. Okada feared, the questionable Wynn

Macau donation has already spawned at least four stockholder lawsuits against

the Company and investigations by both the United States Securities and

Exchange Commission (for possible violations of law including the Foreign

Corrupt Practices Act) and the Nevada Gaming Board. Not only is this

enormous financial commitment a drain on the Company’s coffers, but now Wynn

Resorts stockholders will be saddled with the added costs associated with

responding to the regulatory investigations and lawsuits. If the results

of these investigations and lawsuits include the development of facts regarding

legally questionable practices by the Company, stockholders will be at still

further risk.”

25. In response, the Board caused the Company

to issue a statement as follows:

“[Mr. Okada’s company] Aruze has not been a

stockholder of Wynn Resorts, Limited since February 18, 2012 when its

shares were redeemed by the Wynn Board after a lengthy, third-party

investigation uncovered prima facie evidence of improper conduct under the

Foreign Corrupt Practices Act by Mr. Okada, Universal Entertainment and Aruze
in

their dealings with Philippine officials. This most recent filing is

a regrettable attempt to divert attention from the issues facing Mr.

Okada and Aruze. Given the fact that Aruze was ejected seven months ago as

a Wynn shareholder based on conduct unacceptable for a gaming licensee, it

has absolutely no rights as a shareholder to nominate directors and its

invalid nominations have been rejected on this basis.”

32.

Curiously, in attacking Mr.

Okada, presumably upon the advice of the Board’s legal counsel, it did not deny

his allegations regarding the Company’s $135 million “contribution.”
Notwithstanding

the belittling of these investigations, in fact, the Company was caused by the

Board to expend substantial sums thereupon which it would not have had to incur

but for the illegal or otherwise improper conduct referred to above. While,

ultimately, no charges were brought against the Company or its Board or

enforcement actions taken, none of these fortunate outcomes for the Company can

be attributed to an absence of serious wrongdoing as claimed above. In any

event, since there was no legitimate corporate purpose for the Macau

“donation,” it amounted to a waste of the Company’s assets for which the Board

is responsible.

33.

Moreover, while corruption has

been rampant in Macau, the only place where casino gambling in China is legal,

the central government increasingly has taken action to penalize companies

which have been found to engage in corrupt activities, particularly bribery of

governmental officials. It is inconceivable that the Macau “donation” is not on

the “radar screen” of China’s anti-corruption regulators and that the Company

remains vulnerable to having its otherwise legal activities curtailed or even

eliminated. Thus, any corrupt or otherwise illegal conduct (such as illegal

foreign exchange dealings, bribery or money laundering), particularly if the

Board acquiesces in such conduct, leaves the Company vulnerable to material

negative events, such as interference with its business operations in China and

substantial fines.

C. The Defendants’ Relationship With Mr. Okada

34.

The Board was more than

happy to accept Mr. Okada’s capital when it was needed to help the Company,

notwithstanding its knowledge that he was, from the outset, an unsuitable

shareholder or director of Wynn. Indeed, material facts regarding his

background were kept from the Nevada Gaming Control Board (“NGCB”) and other

regulators to allow Mr. Okada to act as a director and major shareholder of the

Company. It has been reported that at a 2004 regulatory hearing, a Nevada
official

told Mr. Okada that Mr. Wynn was putting his reputation on the line in allying

himself with him, even if the NGCB had never found ties between Mr. Okada,

Japan’s then-largest individual taxpayer, and criminal organizations.[4]

35.

Presumably, following a deterioration in the close personal

relationship between Mr. Wynn and Mr. Okada, in relation to the Macau

“donation,” Mr. Okada called into question whether the magnitude of the

donation was an appropriate use of the Company’s funds. He also demanded an

investigation of the Company’s records related to the purported “donation.”

36.

Although the members of the Board were more than willing to accept

Mr. Okada as a business partner and a director of Wynn previously, following

Mr. Okada’s demands, Mr. Wynn and his allies then retaliated against him.

37.

In November 2011, the Board retained Freeh Sporkin & Sullivan,

LLP (“Freeh”), a law firm with excellent credentials but which could be

expected to (and did) perform as expected by the Board, to investigate whether

Mr. Okada was “suitable” to own shares of Wynn. The Board used the Freeh firm’s

conclusions that he was an “unsuitable” shareholder to justify a forcible

redemption of Mr. Okada’s $2.77 billion stake in the Company in exchange for a

promissory note valued at $1.9 billion. In particular, the Freeh firm
concluded,

inter alia, with respect to Mr.

Okada:

“Mr. Okada, his associates and

companies have arranged and designed his corporate gaming business and

operations in the Philippines in a manner which appears to contravene

Philippine Constitutional provisions and statutes that require 60% ownership by

Philippine nationals, as well as a Philippine criminal statute.

Mr. Okada, his

associates and companies appear to have engaged in a longstanding practice of

making payments and gifts to his two (2) chief gaming regulators at the
Philippines

Amusement and Gaming Corporation (“PAGCOR”), who directly oversee and regulate

Mr. Okada’s Provisional Licensing Agreement to operate in that country.

Since 2008,

Mr. Okada and his associates have made multiple payments to and on behalf

of these chief regulators, former PAGCOR Chairman Efraim Genuino and Chairman

Cristino Naguiat (his current chief regulator), their families and PAGCOR

associates, in an amount exceeding US 110,000.

At times,

Mr. Okada, his associates and companies have consciously taken active

measures to conceal both the nature and amount of these payments, which appear

to be prima facie violations of the United States Foreign Corrupt Practices Act

(“FCPA”). In one such instance in September 2010, Mr. Okada, his

associates and companies, paid the expenses for a luxury stay at Wynn Macau by

Chairman Naguiat, Chairman Naguiat’s wife, their three children and nanny,

along with other senior PAGCOR officials, one of whom also brought his family.

Mr. Okada and his staff intentionally attempted to disguise this

particular visit by Chairman Naguiat by keeping his identity “Incognito” and

attempting to get Wynn Resorts to pay for the excessive costs of the chief

regulator’s stay, fearing an investigation. Wynn Resorts rejected the request

by Mr. Okada and his associates to disguise and to conceal the actual

expenditures made on behalf of Chairman Naguiat.

Additionally,

Mr. Okada, his associates and companies appear to have engaged in a

pattern of such prima facie violations of the FCPA. For example, in 2010 it

also is possible that Mr. Okada, his associates and companies made similar

payments to a Korean government official who oversees Mr. Okada’s initial

gaming investment in that country. Additional investigation is needed to

develop and confirm these possible FCPA violations.

The prima facie FCPA violations by

Mr. Okada, his associates and companies constitute a substantial, ongoing

risk to Wynn Resorts and to its Board of Directors, creating regulatory risk,

conflicts of interest and potential violations of his fiduciary duty to Wynn

Resorts.

Finally,

Mr. Okada’s documented refusal to receive Wynn Resorts requisite FCPA

training provided to other Directors, as well as his failure to sign an

acknowledgment of understanding of Wynn Resorts Code of Conduct, increase this

risk going forward.”

38.

The foregoing conduct, if as

alleged by Freeh, was ample justification for removing Mr. Okada as an

“unsuitable” shareholder of the Company.[5] In fact, each member of the
Board was well aware of Mr. Okada’s

casino project in the Phillipines and, ifits members did not know of any such

alleged illegal payments there, they should have been aware of them when the

Board took Mr. Okada on as a partner and asked that he join the Board or

thereafter.

39.

Indeed, it is inconceivable

that the Board and lawyers assisting it did not thoroughly investigate Mr.

Okada and his affiliated companies beforehand. Notwithstanding his highly

questionable background, according to a March 2, 2012 article in The New
York Times
, during a May “2008

financial conference call, when asked about Mr. Okada’s planned Philippines

venture, Mr. Wynn professed his support and counsel on the project.” According

to the Times, Mr. Wynn said: “He’s my

partner and friend and there is hardly anything that I won’t do for him…I love

Kazuo Okada as much as any man that I’ve ever met in my life.”

40.

Based upon publicly available

information, it appears that it was Mr. Okada’s objections to the Macau

“donation” and personal disagreements with Mr. Wynn that led the Company, in

February 2012, to sue Mr. Okada and the two entities he controls, Aruze and

Universal Entertainment Corp., for breach of fiduciary duty rather than his

newly-uncovered “unsuitability.”[6]

41.

Upon

information and belief, such litigation has been stayed at the request of
federal prosecutors who have been investigating Mr. Okada and his

companies for potential violations of anti-bribery laws in relation to his

casino development on Manila Bay. It has also been reported by Reuters that
the Philippine government

has also been investigating $40 million in payments made by Universal

affiliates to a politically-connected consultant in 2010 around the time

Universal was lobbying for concessions for its casino resort.

42.

Despite the legitimacy of

his objections to the Company’s Macau “donation,” in making the Faustian

bargain that the Board did with Mr. Okada, its members have subjected the

Company irresponsibly to massive expenses and investigations that could have

been avoided. Most recently, the relationship with Mr. Okada has led to further

substantial expenses in Japan. On April 24, 2014, Mr. Okada caused his company
to file a complaint with the Tokyo District

Public Prosecutors Office accusing the Company and Mr. Wynn with

"defamation, harm to public trust and circulation of rumors" in

relation to the publication of an investigation into his company’s conduct in

the Philippines. The Company’s response was to the effect that the criminal

complaint was an attempt by Mr. Okada "to create a distraction from the

investigations pending against him” and that it was related to a previously

filed civil defamation case that a dismissed Tokyo court ruling presently being

appealed.

D. Money Laundering

43.

Macau’s

casinos such as Wynn’s have relied on junket operators for many years to locate

gamblers in mainland China and transport them. Because of Chinese laws

restricting capital transfer out of the country (i.e. the mainland), these

junket operator/middlemen serve a critical role by providing financing to
Chinese

players and also to collect gambling debts.

44.

Lax rules

and/or non-enforcement of them in Macau allow criminals to transform ill-gotten

cash (including restricted capital from the mainland) into legitimate-looking

gambling “winnings” from casinos. A congressional report in October said $202

billion is laundered each year through Macau. Upon information and belief, you

have long known of these illegal practices at the Company’s casinos, not only

in Macau but elsewhere, particularly in Las Vegas.

45.

Notwithstanding

the increasing attention being paid by federal authorities, the Board and Mr.

Wynn, in particular, were well aware or should have been aware that money

laundering was taking place at the Wynn Las Vegas, some of which was at the

behest of drug dealers known to high-level Wynn executives and other employees.

Upon information and belief, a number of Wynn’s senior-level executives and

“hosts”, among others, have been interviewed by FBI and DEA investigators.[7]

Such interviews and the subject matter thereof have created substantial turmoil

at the Company’s Las Vegas casinos causing employee morale issues, turnover and

fear of the consequences of the investigations.

46.

Moreover,

upon information and belief, instead of immediately taking action to stop such

illegal activity after it was brought to Mr. Wynn’s and the Board’s attention,

and reported it to relevant investigators, it appears that the existence of

money laundering “swept it under the

rug.”

47.

It is

believed that there are presently investigations underway regarding the

Company’s possible violations of the Bank Secrecy Act by, inter alia,
the FBI, the IRS and the DEA which, if found, would

subject it to indictment, massive fines and other expenses.[8]

Indeed, in 2013, Las Vegas Sands, a competitor, was required to pay $47 million

in the wake of an investigation of merely two individuals who had used its

casinos to launder money.

48.

By

acquiescing in money laundering at the Company’s casinos, the Board has

subjected and may be continuing to subject Wynn to fines and other penalties.
Moreover,

in the face of investigative reporting by The

Wall Street Journal
(see, article November 21, 2014), the Board’s

spokesman, Michael Weaver, the Company’s Senior Vice President, is quoted as

stating falsely:

“We are not aware of any criminal

investigation of the Company whatsoever and we have serious doubts that any

such investigation is taking place.”

49.

It is simply inconceivable

that the Board and Mr. Weaver were unaware of the fact that the wide-ranging

money laundering investigations referred to above were well underway and that

present and former employees have been interviewed by the FBI and others in

connection therewith.[9]

50.

By failing to disclose timely

all material facts to the investing public with respect to the money laundering

at the Company’s casinos and the foregoing investigations, the Board has
subjected

Wynn to massive claims by purchasers of the Company’s securities. None of such

activities, their cover-up nor the existence of the investigations, despite the

materiality of such facts, has been disclosed in the Proxy Statement.

E. Prostitution

51.

On

information and belief, all Board members have been well aware that employees

of the Company, directly and indirectly, provide prostitutes to selected

gamblers and others at the Wynn Las Vegas, where prostitution is illegal.

Although the NGCB has, to date, been lax in its enforcement, such policy can

change at any time. If it can be shown that the Board and/or the Company’s
senior

executives acquiesced in such illegal conduct, such persons, including Mr.

Wynn, could be found to be unsuitable to operate a casino in Nevada or

otherwise severely penalized. Such conduct renders Wynn vulnerable to

substantial damages and key executives being found “unsuitable.”

F.

Misuse of the Company’s

Assets

52.

Mr.

Wynn has personally availed himself of corporate assets including, inter
alia
, personal living facilities

at a villa on the Company’s property, using the Company’s decorators,

consultants and employees for his personal benefit and otherwise, none of which

is accurately reflected in the Proxy Statement. To the extent thereof, Mr. Wynn

should be required to account to the Company and be required to repay it for

any such unjust benefits he has received and may be still receiving.

G.

The Proxy Statement

53.

As

they did with respect to previous years’ proxy statements, the Defendants

caused the issuance and dissemination of the the Proxy Statement, which is in

violation of §14(a) of the Securities Exchange Act and Rule 14a-9 promulgated

thereunder by the SEC, as well as their duty of candor owed to Plaintiff and

other Wynn shareholders. The Proxy Statement, issued and disseminated to Wynn
shareholders of record as of March 5,

2015 in connection with the Company’s 2015 Annual Meeting of Shareholders,

solicits votes on the Defendants’ behalf and in support of the proposals

advocated by them, including the re-election of directors Hagenbuch and Virtue,

ratification of the Audit Committee’s selection of E&Y as Wynn’s auditor

and in opposition to an institutional shareholder’s proposal to shed light on

Wynn’s political contributions (”Political Contribution Transparency”
proposal).

54.

Upon information

and belief, each of the Defendants personally approved of the substantive

content of the Proxy Statement and/or indirectly controlled its content, all

the while omitting material facts bearing upon how the shareholders of the

Company would vote upon, inter alia, the Board's two nominees for
re-election

to directorships and the continued selection of E&Y as the Company’s

purportedly independent auditor.

55.

Despite

federal disclosure requirements, the Board caused the Proxy Statement to be

issued on the Company’s behalf to misrepresent and fail to disclose material

facts regarding the manner in which Board members were and are selected and

evaluated as well as how they have functioned historically in their stewardship

of the Company.

56.

In order to induce Wynn’s

shareholders to vote in favor of, inter alia, the re-election of the

Defendants’ two nominees for re-election. to bolster their apparent legitimacy

as directors and to secure E&Y as Wynn’s auditor, the Proxy Statement set

forth various representations about

the purported qualifications of the members of the Board (including 2015’s two

nominees for re-election, Messrs. Hagenbuch and Virtue), the conduct of the

various committees of the Board and their individual members and with respect

to E&Y and its services.

57.

Moreover, by failing to

disclose the material facts regarding the Defendants’ conduct as described

herein and in the Demand Letter, the Proxy Statement set forth an unrealistic

portrait of the Defendants which presented them as highly credible regarding

the issues presented for a shareholder vote. In particular, had the Defendants

disclosed all the material facts with regard to their multi-year misconduct,

they would have lost the credibility integral to shareholders’ ability to
evaluate

their recommendations and solicitations.

58.

The deceptive statements

regarding the Board and, in particular, the material facts omitted from the

Proxy Statement as to the wrongdoing of such directors, are likely to directly

cause the re-election of the Board’s nominees and to otherwise cause

shareholders to vote as recommended by the Defendants..

59.

In addition to the request

that Wynn shareholders re-election two directors and vote against the Political
Contribution

Transparency proposal, the Proxy Statement also asks

that the Company’s shareholders

ratify the Audit Committee’s appointment of E&Y as the independent public

accountants (i.e. auditor) for the Company. In seeking such ratification, the

Proxy Statement does not disclose the highly material fact that E&Y had

failed to conduct its audits of Wynn’s financial statements in conformity with
GAAS

and represented falsely in its opinion letters as to such statements that they

were prepared in conformity with Generally Accepted Accounting Principles

(“GAAP”) when the Board knew or should have known that they were not. In

particular, E&Y’s failure to expose and disclose, inter alia, Wynn’s
money laundering and the serious breakdown in

the Company’s controls with respect thereto was a breach of its engagements to

provide auditing services in conformity with GAAS.

60.

The Defendants knew but

did not disclose in the Proxy Statement that, at minimum, E&Y was

undoubtedly negligent or reckless in the performance of its audit

responsibilities owed to the Company. Moreover, the Defendants knew and did not

diclose in the Proxy Statement that E&Y had, over a period of many years,
breached its annual contracts with the

Company (i.e. the terms of its engagement) in carrying out the audits that it

did and by issuing false and misleading opinion letters that it knew or should

have known were unjustified.

61.

As

a result of the deceptive Proxy Statement and, in particular, its failure to

disclose material facts regarding E&Y and its defective audits and false

“opinion” letters, the ratification of E&Y’s re-appointment as Wynn’s

auditor by the Board’s Audit Committee,is likely to occur.

62.

The

Proxy Statement states with respect to the proposed re-election of Messrs.

Hagenbuch and Virtue:

“The Board has voted to reduce the size of Class I

to two directors, effective upon expiration of the terms of the current Class I

directors at the 2015 Annual Meeting, resulting in the size of the Board being

reduced from eight directors to seven. The Board has nominated the two nominees

listed below to serve as Class I directors for terms that commence upon

election at the 2015 Annual Meeting”

.

In making such statement and others, the
Defendants misrepresented

that the entire Board voted for such

reduction and nominated solely the two nominees. In fact, the Defendants

concealed the fact that they are forcing Ms. Wynn, currently and a long-time

director and major shareholder of the Company, off the Board, have not

disclosed the reasons for doing so and that she has not so voted.[10]

On March 16, 2015, Ms. Wynn sent a letter to the Company’s shareholders stating,
inter alia
,:

“I have served tirelessly on your behalf for the past 13 years as

a director and co-founder of Wynn Resorts. The board recently took action

to shrink the size of the board by one director and thereby exclude me from the

board despite my immense industry knowledge and expertise, and my role building

and promoting the Wynn business and brand through the years. This action

was without merit and therefore, I have decided to file my nomination and seek

your vote for my re-election to the board.”[11]

63.

The Defendants responded, in part, to Ms.

Wynn’s letter to the Company’s shareholders, while concealing the fact that

they had for many years supported her continuation as a director, stating, inter
alia
,:

“Following an extensive process which included
multiple meetings

and the participation of Ms. Wynn, the Corporate Governance Committee

determined not to recommend that Ms. Wynn be re-nominated due to:

 

 

concerns over actual and
  potential

  conflicts of interest; in this regard the Corporate Governance Committee

  believes that Ms. Wynn has placed her individual interests ahead of her

  duties as a director, including in her cross claim against the Company’s

  Chief Executive Officer;

 

 

 

the Committee’s view that
  Ms. Wynn’s

  claims in her lawsuit and ongoing dispute with the Company’s Chief Executive

  Officer have reduced the effectiveness of her participation on the Board; and

 

 

 

the Committee’s view that
  Ms. Wynn is

  not meaningfully contributing to the Board’s discussion and work, which is

  increasingly conducted at the Board committee level, in which Ms. Wynn

  is unable to participate due to Ms. Wynn’s lack of independence under

  NASDAQ listing standards and resulting inability to serve on any existing

  Board committees.

64.

Ms. Wynn contradicted Defendants’

statements quoted in the previous paragraph and credibly said in her own

supplement to her proxy

solicitation:

“For

the reasons described in detail above, I represent the superior candidate when

compared with Mr. Hagenbuch, who has little, if any, experience in the

highly regulated gaming industry. In contrast, I have spent more than four

decades in the resort, hospitality and gaming industries. Because of my

substantial ownership of the Company, my interests are aligned with yours.

Moreover, I am fully committed to continuing my efforts to hold Company

management accountable to our stockholders and to represent the views of women

on a Board otherwise composed entirely of men.”

60. Ms. Wynn went on to further point out the
deceptive nature of

the Defendants’ statements and said:

“First, the Company Proxy Statement states

that the Nominating and Corporate Governance Committee believes that I have

placed my own interests ahead of the company's and created actual and potential

conflicts of interest because my lawsuit against Mr. Wynn, if successful,

could trigger a violation of indenture covenants. I believe that this is

neither an authentic nor a valid reason to remove me from the Board.

I believe that this is not an authentic reason

because this issue existed at the time

of my election to the Board in November 2012 and, in that election, the Board

apparently had no problem re-nominating me as a director and urging

stockholders to vote for me. The Board's decision not to re-nominate me now,

when nothing has changed since the last time I was up for re-nomination,

illustrates my belief that this reason is nothing more than a pretext by the

Board.


I also believe that this is not a valid reason. My

dispute with Mr. Wynn is one between two stockholders who disagree over

the continued validity of a stockholders agreement entered into long ago. It's

a stockholder-to-stockholder issue and not a Board issue. This issue will

persist whether or not I serve on the Board, and in my opinion, it does not

impact the ability of either of us to act as effective Board members.

Furthermore, although I am seeking to gain control of the shares I own, I

remain devoted to the company and its future success. I intend to remain a

significant stockholder indefinitely. Be assured that my interests as a

stockholder are aligned with yours. Furthermore, in my view, there is no actual

or potential conflict of interest other than a possible technical violation of

the indenture covenants if my cross-claim against Mr. Wynn is successful.

A violation of the indenture covenants will only occur if two things happen:

there is a change of control of the Company and, within 60 days

thereafter, certain of the Company's outstanding notes are rated below

investment grade by both rating agencies that rate such notes. Even if I win my

cross-claim and the Company's notes are downgraded by both rating agencies,

such a violation could be prevented by my agreeing to let Mr. Wynn vote

fewer shares than he now does, but still a sufficient number to ensure that our

combined share total is larger than that of the next-largest stockholder. While

such an agreement cannot be certain, as the second and third largest

stockholders of the company, respectively, Mr. Wynn and I have every

incentive to arrive at an agreement and avoid triggering a covenant violation.

Second, the Company Proxy Statement states that the

Committee believes that the pendency of that lawsuit has "reduced the

effectiveness" of my participation on the Board because independent

directors have voiced concerns that Board discussions could be "negatively

impacted by the perception that [I] might seek to utilize statements made at

Board meetings" in order to advance my litigation claims or my position as

a stockholder. The Committee apparently

did not have concerns about the effectiveness of my participation on the Board

or the effect of my presence on deliberations of the Board when it re-nominated

me in November 2012, many months after my claim was filed.
Once again, I
believe that this reason is

pretextual, because nothing has changed since the last time I was up for

re-nomination.
In fact, I do not recall hearing any member of the Board

ever raise concerns about any potential chilling effect that my litigation with

Mr. Wynn may have on deliberations. If

any member of the Board had such concerns, it is my view that the issue should

have been raised and discussed, rather than referenced for the first time in

the Company Proxy Statement.
Moreover, the independent directors meet in

Committee, as well as in executive sessions following Board meetings, so they

have ample opportunity to speak with one another without Mr. Wynn or me in

attendance.

Finally, the Company Proxy Statement states that the

Committee is focused on my "lack of independence under NASDAQ listing

standards and resulting inability to serve on any existing Board

committees." I find this statement to be quite puzzling. It turns out that

likely I am "independent." I believe that I satisfy all of the bright

line tests for independence under the NASDAQ rules, and that the Board could
make

a determination that I am "independent" if it wanted to. I wouldn't

have qualified when I was married to the Chairman and CEO, but obviously that's

no longer an issue. It's simply unfair of the Board to unjustifiably state the

opposite conclusion and then use that as a reason for excluding me.

Furthermore, I think that it is a curious argument to make given that the Board

chose to shrink the size of the Board rather than nominate an independent

director in my place. As a result, my exclusion from the Board would have

absolutely no effect on increasing the number of independent directors who can

serve on existing Board committees. All it does is eliminate a strong director

from the ranks of the Board.

There are two seats up for election. I intend to use

the proxies given to me to vote for myself and for the one candidate nominated

by the Board other than John J. Hagenbuch. Also, as I discuss in more detail

later in this proxy statement, if the stockholders agreement between

Mr. Wynn and me is valid, as Mr. Wynn contends, he is obligated to

endorse and vote for me as a director.

For

the reasons described in detail above, I represent the superior candidate when

compared with Mr. Hagenbuch, who has little, if any, experience in the

highly regulated gaming industry. In contrast, I have spent more than four

decades in the resort, hospitality and gaming industries. Because of my

substantial ownership of the Company, my interests are aligned with yours.

Moreover, I am fully committed to continuing my efforts to hold Company

management accountable to our stockholders and to represent the views of women

on a Board otherwise composed entirely of men.”

61. The Proxy Statement

also includes a stockholder proposal by the New York State Common Retirement

Fund (the “Fund”), the beneficial owner of 284,854 shares as of

November 25, 2014 (the "

Political Contribution Transparency " Proposal). The Proxy

Statement contains the following description of the Political Contribution
Transparency Proposal:

“Resolved, that the shareholders

of [the Company] hereby request that the Company provide a report, updated

semiannually, disclosing the Company's:

1. Policies

and procedures for making, with corporate funds or assets, contributions and

expenditures (direct or indirect) to (a) participate or intervene in any

political campaign on behalf of (or in opposition to) any candidate for public

office, or (b) influence the general public, or any segment thereof, with

respect to an election or referendum.

2. Monetary

and non-monetary contributions and expenditures (direct and indirect) used in

the manner described in section 1 above, including: a.The identity of the

recipient as well as the amount paid to each; and 
b.The title(s) of the

person(s) in the Company responsible for decision-making.

The report shall be presented to the board of

directors or relevant board committee

and posted on the Company's website."'

62. The

Fund submitted the following Supporting Statement regarding the
Political Contribution Transparency Proposal:

"As long-term shareholders of Wynn

Resorts, we support transparency and accountability in corporate spending on

political activities. These include any activities considered intervention in

any political campaign under the Internal Revenue Code, such as direct and

indirect contributions to political candidates, parties, or organizations;

independent expenditures; or electioneering communications on behalf of

federal, state or local candidates.

Disclosure is in the best interest of the company

and its shareholders and critical for compliance with federal ethics laws.

Moreover, the Supreme Court's Citizens United decision recognized the

importance of political spending disclosure for shareholders when it said,

‘[D]isclosure permits citizens and shareholders to react to the speech of

corporate entities in a proper way. This transparency enables the electorate to

make informed decisions and give proper weight to different speakers and

messages.’ Gaps in transparency and accountability may expose the company to

reputational and business risks that could threaten long-term shareholder

value.

Wynn Resorts contributed at least $1,800,053 in

corporate funds since the 2004 election cycle. (CQ: http://moneyline.cq.com and

National Institute on Money in State Politics: http://www.followthemoney.org)

However, relying on publicly available data does not

provide a complete picture of the Company's political spending. For example,

the Company's payments to trade associations used for political activities are

undisclosed and unknown. In some cases, even management does not know how trade

associations use their company's money politically. The proposal asks the

Company to disclose all of its political spending, including payments to trade

associations and other tax exempt organizations used for political purposes.

This would bring our Company in line with a growing number of leading

companies, including Qualcomm, Exelon, Merck and Microsoft that support

political disclosure and accountability and present this information on their

websites.

The Company's Board and its shareholders need

comprehensive disclosure to be able to fully evaluate the political use of

corporate assets. We urge your support for this critical governance

reform."

63. The

Proxy Statement contains the Board's argument in opposition to the Political
Contribution Transparency Proposal which, while partially accurate, conceals

the material fact that many of the Company’s direct and indirect

contributions to political candidates, parties, or organizations, independent

expenditures and/or electioneering communications (directly

or through Wynn Resorts Limited PAC, i.e. "Wynn PAC" its political
action committee) on

behalf of federal, state or local candidates or parties were made and are being

made to benefit personally members of the Board and senior officers of the

Company:

"After careful consideration, the Board of

Directors recommends that stockholders vote AGAINST this proposal for the

following reasons:

The Company operates in a highly regulated industry,

and the decisions of federal, state, and local governments can significantly

impact the Company. Therefore, the Board believes that it is critical that the

Company participate in the political process to protect its business interests

and its stockholders' interests. The Company is committed to participating in

the political process as a good corporate citizen, in full compliance with

applicable laws. The Company also has adopted the Political Contributions

Policy and Procedures. In addition to the Company's Code of Business Conduct

and Ethics, the Political Contributions Policy and Procedures governs the

Company's consideration of political activities, including the Company's

political contributions at the federal, state, and local levels and the

Company's membership in trade associations.

The Company's political contributions at the

federal, state, and local levels are subject to extensive internal review and

oversight to confirm their compliance with applicable contribution limits and

regulations. Recognizing that the Company likely will not agree with every

position a candidate takes, the Company's government affairs team meets with a

candidate prior to making significant contributions to determine whether

supporting the candidate is in the best interests of the Company and its

stockholders. In addition, the Company reports to the Audit Committee on its

political contributions on a periodic basis.

The Company also believes that it provides

sufficient transparency with respect to its political contributions. The

Company's participation in political activities includes contributions to

federal elections through Wynn PAC. In compliance with federal law, [Wynn PAC]

files regular reports with the Federal Election Commission ("FEC") to

disclose political contributions by Wynn PAC. These reports are publicly

available on the FEC website. In addition, reports regarding the Company's

specific political contributions in various jurisdictions are publicly

available at each jurisdiction's official website.

From time to time, the Company pays annual

membership dues to industry trade associations. The trade associations in which

the Company participates may engage in political activities, but such decisions

are governed by those associations' respective bylaws. Thus, even when the

Company participates in these associations, the Company does not control how

they use membership dues. The Company expects these trade associations to

comply with applicable laws with respect to their political activities. As

such, the Board believes that additional disclosures regarding the specific

payments made to these trade associations would not benefit stockholders.

In sum, the Company already discloses sufficient

information regarding its political contributions; and the Company has an

appropriate system of oversight, including its Political Contributions Policy

and Procedures, designed to confirm that the Company's political contributions

comply with applicable law and are in the best, long-term interests of the

Company and its stockholders. Accordingly, the Board believes that preparing an

additional report as requested in the proposal would be unnecessary and an

imprudent use of the Company's time and resources."

64. The Proxy Statement failed to disclose that many of the

Company’s direct and indirect political contributions have absolutely no

connection to the Company’s business operations or serve any legitimate

business purposes. These included, inter

alia
, contributions to the 2012 presidential campaign of Willard “Mitt”

Romney and congressional candidates in districts far-removed from any of the

Company’s casinos or other businesses. Indeed, upon information and belief,

many or most of such political contributions were made and are being made to

reflect the political philosophy of Mr. Wynn and other members of the Board,

none of which is disclosed by the Defendants in the Proxy Statement or

follow-up solicitation materials.

I. FALSE CERTIFICATIONS

65. As

the senior-most officer of the Company, Mr. Wynn, among others in management,

had extensive duties to ensure the accuracy and completeness of financial

information disseminated to investors.

66. As

noted in American Institute of Certified Public Accountants (“AICPA”) auditing

standard, Section 110.03, a public company’s management is responsible for

preparing financial statements in accordance with GAAP:

“The financial statements are

management's responsibility.… Management

is responsible for adopting sound accounting policies and for establishing and

maintaining internal controls that will, among other things, initiate, record,

process, and report transactions (as well as events and conditions) consistent

with management’s assertions embodied in the financial statements. The entity's

transactions and the related assets, liabilities, and equity are within the

direct knowledge and control of management.

The auditor’s knowledge of these matters and internal controls is limited

to that acquired through the audit. Thus, the fair presentation of financial

statements in conformity with generally accepted accounting principles is an

implicit and integral part of management's responsibility.”

67.

In Accounting Series Release 173 (July 2,

1975), the SEC reiterated the duty of management to present a true

representation of a company’s operations:

“[I]t is important that the

overall impression created by the financial statements be consistent with the

business realities of the company’s financial position and operations.”

68.

Pursuant to the Sarbanes-Oxley Act of 2002

(“SOX”) and SEC rules promulgated thereunder, the chief executive officer and

chief financial officer of reporting corporations, such as the Company, are

required to certify as to the accuracy and completeness of a company’s

financial statements.

69.

At all relevant times, the Company’s senior

management, including Mr. Wynn and the members of the Audit Committee,,

including Defendant Hagenbuch, repeatedly opined that internal controls over

financial reporting were adequate and re-nominated E&Y as Wynn’s auditor,

despite the fact that there was, inter alia,, illegal

money laundering at Wynn casinos , as well as other serious wrongful conduct as

referred to herein. Notwithstanding such

wrongdoing, Mr. Wynn unjustifiably and repeatedly executed "clean

certifications" pursuant to Sections 302 and 906 of SOX. These
certifications falsely and deceptively

stated, inter alia, that the Company

had disclosed all significant deficiencies and material weaknesses in the

design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the Company's ability to record, process,

summarize and report financial information. None of such material facts were

disclosed in the Proxy Statement. In ther context of the Defendants’ proposed

re-election of Defendant Hagenbuch, such omission of material facts is

particularly significant.

V. BREACHES OF

COMPANY POLICIES

70.

As an officer (in the case of Mr. Wynn) and

as directors of the Company, the Defendants owed to the Company and its

shareholders fiduciary duties of trust, due care, candor, good faith, and

loyalty. Each of the Defendants knew it

was his fiduciary duty and responsibility to use his utmost ability to oversee

the management and administration of the Company’s business and affairs, to

ensure that the Company complied with all of its legal obligations and operated

in a diligent, honest and prudent manner, and to ensure that effective

policies, procedures, systems, and internal controls are in place to prevent,

detect and promptly terminate any unlawful corporate conduct or unethical

business practices such as those described above.

71.

Each Defendant acquiesced in at least some of

the wrongful conduct described herein, thereby breaching his fiduciary duty of

loyalty and good faith owed to the Company and its shareholders. Such conduct
was and is not the product of a

valid exercise of business judgment, and constitutes a non-exculpable breach of

fiduciary duty for which each director faces a substantial threat of personal

liability.

72.

Each Defendant breached his respective duty

of loyalty and good faith by knowingly permitting and/or acquiescing in

historical engagement by the Company’s management in violations of the FCPA,

anti-money laundering laws and other laws, rules and regulations applicable to
Wynn

and its subsidiaries, as described herein, and by failing to implement and/or

maintain adequate internal controls prevent violations of the FCPA, the Bank
Secrecy

Act and other laws, as described herein.

73.

The Defendants, as a result of their service

on the Board and on the committees described in the Proxy Statement, their

knowledge and purported expertise as alleged therein, the receipt by the Board

and those committees of regular and complete reports, were aware of the

unlawful and unethical business practices alleged herein, yet knowingly and/or

recklessly breached their fiduciary obligations as officers and/or directors of

the Company, by permitting them to be continued and/or covered-up.

74.

Wynn’s improper inducements and underhanded practices

aimed at influencing Macau government officials in order to secure favorable

concessions for the Company was not the result of a rogue employee or division,

but instead, notwithstanding the Code, reflected an “anything goes” business

philosophy, directed, encouraged and aggressively pursued to increase revenues

and profits through the payment of bribes in violation of the FCPA, the

engagement in money laundering and acquiescence in prostitution at Wynn’s

casinos over compliance with laws and regulations designed to protect the

Company without due regard to the long-term consequences of such

wrongdoing. Upon information and belief,

these widespread practices were well known to senior management and the entire

Board, and were knowingly pursued despite their knowledge of its illegality

and/or cover-up and the inevitable long-term harm to the Company. Management of
Wynn, accompanied by Board

passivity, knowingly made a calculated bet that any legal consequences from the

bribery, money laundering and other wrongful conduct described herein would not

be found out by governmental regulators and enforcement agencies. By knowingly
or negligently permitting this

strategy to continue, notwithstanding its well-publicized codes of behavior,

the Board adopted such conduct as Company policy, and committed a sustained and

systematic failure of compliance oversight in breach of each Board members’

fiduciary duty of loyalty and good faith.

75.

To this day, none of the Defendants took

steps to disclose publicly in the Proxy Statement or otherwise the Company’s

bribery, money laundering activities and passive encouragement of prostitution

promptly to the DOJ, the SEC, Nevada gaming authorities and other regulatory

agencies, as they were legally required to do. Even as to those of the

Defendants who may not have been directors of the Company while illegal conduct

was taking place, they have nevertheless taken no action to punish those

directly responsible for the wrongdoing or to expose it to the light of day.

76.

The Board established a Compliance

Committee in order to provide the

illusion of compliance with various laws, regulations and the Code. The only
current member of the Compliance

Committee identified in the Proxy Statement is Gov.. Miller, a former governor

with extensive political connections in Nevada and elsewhere. Notwithstanding
this

Committee and despite Mr. Miller’s personal knowledge of applicable Nevada,

federal and other laws (including Las Vegas’ anti-prostitution law), the Board
has flagrantly disregarded and continues to

disregard the Code and other corporate governance guidelines and standards,

which have been published hypocritically knowing that they would not be and

were not being followed.

VI. WRONGDOING

OF E&Y

77.

During the period of the wrongdoing alleged

herein, the Audit Committee of the Board appointed E&Y as Wynn’s

independent registered public accounting firm (i.e. auditor). As an integral
part of its obligations to the

Company and its shareholders and pursuant to the terms of its annual retention

by the Company’s Audit Committee, E&Y was obligated to, inter alia:

carry out its audits in conformity with GAAS, and render its opinions that the

Company’s financial statements were prepared in conformity with GAAP and were

otherwise accurate in all material respects.

78.

It was E&Y's responsibility to evaluate

the Company’s internal controls, which it repeatedly failed to do over multiple

years or, to the extent that it did so, any such evaluation was performed

negligently. Despite knowing otherwise, E&Y stated in each of its annual

opinion letters, and in its February 27, 2015 report to the Board and Wynn

stockholders, in part, as follows:

"We conducted our

audit in accordance with the standards of the Public Company Accounting

Oversight Board (United States). Those standards require that we plan and

perform the audit to obtain a reasonable assurance about whether effective

internal control over financial reporting was maintained in all material

respects….We believe that our audit provides a reasonable basis for our

opinions…..

A company's internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial

reporting the preparation of financial statements for external purposes in

accordance with [GAAP]. A company's internal control over financial reporting

includes those policies and procedures that (1) pertain to the maintenance of

records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of the assets of the company; (2) provide

reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with [GAAP] and that receipts

and expenditures of the company are being made only in accordance with

authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use or disposition of the company’s assets that could have a

material effect on the financial statements.

In

our opinion the company maintained in all respects effective internal control

over financial reporting as of December 31, 2014.”

79.

Each of the Defendants knew or should have

known that the foregoing statements regarding E&Y’s audits and Wynn’s

controls were false. If E&Y had conducted its year-end audits of the

Company’s consolidated and subsidiary financial statements in conformity with

GAAS, as it was contractually obligated to do and represented that it did,, it

either was obvious or should have been obvious to E&Y that the Company's
internal controls were

materially deficient and that Wynn had

been engaging in the material wrongdoing alleged herein over a period of many

years.

80.

E&Y and its engagement partners were

motivated to “look the other way” and deliver “clean” opinions as to the

Company’s year-end financial statements when, in fact, E&Y knew that such

“clean” opinions were wholly unjustified.

In order to retain the continued patronage and substantial fees

generated by the Company, E&Y repeatedly generated “clean,” unqualified

opinions that the year-end financial statements of the Company and its

subsidiaries were prepared in accordance with GAAP and that such statements

were audited by it in conformity with GAAS when E&Y knew such

representations were false and would deceive the investing public and the SEC.

81.

The false statements made by E&Y in its

annual opinion letters on the Company’s year-end financial statements were

materially false and misleading because of, inter

alia
, the widespread deficiencies in its internal controls known or which

should have been known to E&Y, its engagement partners and each of the

members of the Audit Committee that allowed much of the unlawful conduct

complained of herein to occur, including, inter alia,the improper use of
Wynn’s funds in

violation of the FCPA, failing to report known money laundering activities in

violation of the Bank Secrecy Act.

82.

Notwithstanding, or perhaps because of E&Y’s

acquiescence, the Company’s Audit Committee repeatedly selected E&Y as the

Company’s auditor and proposed its choice to Wynn shareholders for
ratification,

most recently in the Proxy Statement. By concealing material facts regarding

E&Y’s competence and credibility as the Company’s auditor, the Board’s

solicitation of shareholder votes in favor of ratification of its

re-appointment, was deceptive and in violation of §14(a) of the Exchange Act

and Rule 14a-9 promulgated thereunder.[12]

COUNT I

(For Violations of Section 14(a) of the Exchange
Act)

83.

Plaintiff repeats and re-alleges each and

every allegation contained above as if fully set forth herein.

84.

This claim is asserted by Plaintiff

individually against the Defendants who were members of the Company’s Board of

Directors when the Proxy Statement was issued and disseminated to Wynn

shareholders. Such claim arises from

their violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9 in

connection with such Proxy Statement which solicited the votes of Plaintiff and

other shareholders in connection with the Company’s Annual Meeting of

Shareholders to be held on April 24, 2015.

85.

Through the Proxy Statement, the Defendants

solicited the votes of Plaintiff and the other Wynn shareholders in connection

with, inter alia, the re-election of Messrs. Hagenbuch and Virtue to the

Board, the ratification of the Audit Committee’s selection of E&Y to

continue as Wynn’s auditor and the Political Contribution Transparency Proposal
.

86.

The Board, through the Proxy Statement,

recommended that Wynn shareholders vote in favor of each of the Board’s

proposals; in particular, in favor of the re-election of each of the two Board

members nominated for re-election, the ratification of the appointment of

E&Y as Wynn’s auditor and against the Political Contribution Transparency



Proposal.

87.

The Proxy Statement containes untrue

statements of material fact and omitted other facts necessary to make the

statements made not misleading, and failed to disclose material facts as more

fully set forth above. In particular,

the 2013 and 2014 Proxy Statements failed to disclose material information

regarding, inter alia, the

credibility of the Defendants and their recommended votes, as set forth above.

88.

In addition to the frustration of Plaintiff’s

personal suffrage rights as a Wynn shareholder, these deceptions materially

affect and are likely to proximately cause, inter

alia
, the re-election of Defendants Hagenbuch, the ratification of E&Y

as Wynn’s auditor and the rejection of the Political Contribution Transparency

Proposal.

89.

By utilizing the Proxy Statement as described

herein, the suffrage rights of Plaintiff and each other shareholder of the

Company have been violated by the Defendants, which conduct is in violation of
§14

(a) of the Exchange Act and SEC Rule 14a-9.

COUNT

II


(Breach of the Duty of Candor)

90.

Plaintiff repeats and re-alleges each of the

allegations set forth above as if fully set forth herein.

91.

Each of the Defendants, at the time of the

issuance and dissemination of the Proxy Statement, by reason of the fact that

such Proxy Statements was and is false and misleading, as described herein,

breached his respective duties of candor owed to Plaintiff and the Company’s

other shareholders.

92.

For the reasons set forth with respect to

Plaintiff’s Exchange Act claims, he is entitled to injunctive relief as set

forth below and such damages as he may prove at trial.

PRAYER FOR

RELIEF


WHEREFORE, Plaintiff prays for judgment as follows:



  1.      Determining

         that the Proxy Statement is false and misleading in violation of §14(a) of
         the

         Exchange Act and Rule 14a-9 promulgated thereunder and that the Defendants
         have

         breached their duty of candor owed to Plaintiff and other Wynn
         shareholders;


  2.      Enjoining

         the actions taken pursuant to the Proxy Statement at the Company’s 2015
         Annual

         Meeting of Shareholders;


  3.      Requiring

         the Defendants to issue and disseminate a replacement for the Proxy
         Statement

         that is in compliance with the requirements of applicable federal law and
         rules

         and consistent with the Defendants’ duty of candor and to hold a meeting
         of

         Wynn’s shareholders in connection therewith;


  4.      Awarding

         Plaintiff and his counsel reasonable attorneys’ fees, expert fees and
         other

         reasonable costs and expenses; and
  5. E.

        
    Granting

         such other and further relief as this Court may deem just and proper.

JURY DEMAND

Plaintiff demands

a trial by jury on all claims so triable.

Dated:

March 23, 2014 ALBRIGHT,

STODDARD, WARNICK

AND ALBRIGHT



G. Mark Albright

Nevada Bar No. 1394

801 S Rancho Dr D4

Las Vegas, NV 89106

(702) 384-7111

gma@albrightstoddard.com


GREENFIELD & GOODMAN, LLC

Richard D. Greenfield

250 Hudson Street, 8th Floor

New York, NY 10013

(917) 495-4446

whitehatrdg@earthlink.net

Counsel

for Plaintiff




[1]

PAC has a long history of assisting boards of directors in developing defensive

strategies in opposition to shareholder pre-suit demands and derivative

litigation, uniformly collecting millions of dollars in doing so..

[2]

The recent decision of the Defendants not to re-nominate Mr. Wynn’s former

wife, Ms. Wynn, to a seat on the Board is purportedly contrary to Mr. Wynn’s

personal wishes. Indeed, Ms. Wynn has filed her own proxy materials with the

SEC and is soliciting proxies from the Company’s shareholders.

[3]

Neither the existence of the “committee” nor its members have been disclosed in

the Proxy Statement, which similarly did

not disclose the Board’s receipt of the Demand Letter nor what has been done in

response thereto.

[4]

The relationship with Mr. Okada was so close that the Board agreed to open the

Okada Restaurant at the Wynn Las Vegas. That restaurant has now been closed in

the wake of the deterioration of that relationship at substantial cost to the

Company.

[5] The Second Amended and
Restated Articles of

Incorporation of Wynn (“Articles”) provide for standards that seek to define an

“Unsuitable Person.” As set forth on page 8 of the Articles, the phrase

Unsuitable Person “shall mean a Person who . . . in the sole discretion of
the board of directors of the Corporation, is deemed

likely to jeopardize
the Corporation’s or any Affiliated Company’s

application for, receipt of approval for, right to the use of, or entitlement

to, any Gaming License.” [emphasis added]

[6] Well-before the Macau
“donation” issue

erupted, the Board and Mr. Wynn in particular, were aware of Mr. Okada’s

activities in the Philipines and, in particular, statements made regarding Mr.

Wynn’s involvement therein. The Freeh report states that “Mr. Okada

asserted that all his efforts in the Philippines prior to the change of

presidential administration in the summer of 2010 were undertaken on behalf of

and for the benefit of Steve Wynn and Wynn Resorts, and that he only undertook

to develop a gaming business in the Philippines independently subsequent to the

change of presidential administrations. On

December 20, 2007, Aruze Corp. issued a press release [which] stated the

following: “The Company looks to acquire the licenses necessary

to operate a casino resort in the Asian region, including Macau, and to

commence operation of a casino resort on its own over the next business

year. . . . For this know-how, which is vital from a management perspective,

the Company intends to enlist the full cooperation of…Steve Wynn in its future

pursuits regarding this project. For the purpose of successfully operating a

casino resort in the Asian Region on an independent basis, the Company has

received agreement from Steve Wynn that he will supply all necessary support,

including active personal exchange with Wynn.…” [emphasis added] There is no

evidence that neither the Company nor any Board member took steps to contradict

Mr. Okada’s statements, directly or through Azure.

[7]

The Demand Letter identified two of the Company’s former employees with

specific knowledge of Wynn’s money laundering practices in Las Vegas.

[8] It

is understood that these investigations include interviews by the FBI and DEA

of many of the Company’s largest customers.

[9] Curiously, following the
article in The Wall Street Journal, the Board’s legalcounsel,

Donald Campbell, Esquire, is quoted in the November 21, 2014Las Vegas

Review-Journal
as saying "Wynn...doesn't believe its under
federal

investigation..."[emphasis added]

[10]

In fact, the Proxy itself, mailed with the Proxy Statement, misrepresents that

The Board of Directors recommends

that you vote FOR” its nominees, Messrs. Hagenbuch and Virtue.[emphasis added]

[11] Ms. Wynn further states
therein: “I have more

than 40 years of gaming and hospitality experience and have been an integral

part of helping the company grow into the successful enterprise it is

today. No one at the company, other than our Chairman and CEO, is more

knowledgeable about its history, its operations, its customers, or its

award-winning staff. ..I am also the third-largest stockholder of Wynn

Resorts, with more than 9.5 million shares, representing a 9.4% interest in the

company. It is clear that my interests are very much aligned with

the interests of you, my fellow stockholders. Given my substantial

stockholdings in the company, you can be assured that I am keenly focused on

viewing every board action through the lens of generating overall stockholder

value. My unique history with Wynn Resorts has afforded me a strong,

independent voice on the board. I

do not simply toe the party line and instead hold our management team,

including our Chairman and CEO, accountable to our stockholders.
The

board’s action to exclude a strong and knowledgeable voice may make for a more

homogeneous and compliant board, but I believe that is not at all in the best

interests of our stockholders.”[emphasis added]

[12]

While the Board appears to have the power to disregard the shareholder vote

should a majority of the shares voting not ratify E&Y as the Company’s

auditor, in practical terms, the Audit Committee would have to replace E&Y.

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on construction, real estate, secured finance, business litigation and insurance defense.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services. Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.  Call 702-384-7111 or email Mark Albright at gma@albrightstoddard.com.

 

 

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