Valjo v. Euphoria Wellness – Nevada Supreme Court Bars Revival of Time-Barred Claims Through Post-Hoc Ownership Agreements

1. Introduction

In Valjo, Inc. v. Euphoria Wellness, LLC (Nos. 87929 & 88137, Aug. 14 2025), the Supreme Court of Nevada confronted an attempt by related business entities to breathe life back into claims that were already time-barred.

The dispute stemmed from industrial cannabis equipment housed in Euphoria Wellness’s Las Vegas facility. After contractual tensions with equipment‐provider E&T Ventures, LLC culminated in Euphoria taking possession of the machinery in 2019, a web of related litigation ensued. Joseph Kennedy—principal of E&T and later sole owner of plaintiff Valjo, Inc.—sought to leverage a post-hoc 2023 “stipulation agreement” with E&T to claim outright ownership and restart the statute of limitations. The district court dismissed Valjo’s 2023 lawsuit as untimely and sanctioned it with attorney fees. On appeal, the Supreme Court unanimously affirmed.

Key issues addressed by the Court included:

• When do conversion and interference claims accrue under Nevada law?
• Can a party reset the statute of limitations by executing a new ownership instrument long after the wrongful act?
• Under what circumstances may attorney fees be awarded against a plaintiff for bringing time-barred claims?

2. Summary of the Judgment

The Court held:

• All of Valjo’s claims (conversion, intentional interference with contractual relations, unjust enrichment, and declaratory relief) accrued no later than July 27 2019, when Valjo physically attempted to repossess the equipment and was denied access.
• The three-year limitation period in NRS 11.190(3)(c) therefore expired July 27 2022. Valjo’s June 21 2023 complaint was untimely.
• A self-generated 2023 stipulation declaring Valjo the equipment’s “owner” could not restart the statutory clock; allowing such would “circumvent the statute of limitations.”
• The district court’s award of attorney fees and costs under NRS 18.010(2)(b) was proper because Valjo knowingly pursued frivolous, time-barred claims.

3. Analysis

3.1 Precedents Cited and Their Influence

• Buzz Stew, LLC v. City of North Las Vegas, 124 Nev. 224 (2008) – Sets the standard for NRCP 12(b)(5) dismissal: assuming the complaint’s facts as true, dismissal is warranted when no set of facts would entitle relief. The Court applied this lens when reviewing the district court’s dismissal.
• Bemis v. Estate of Bemis, 114 Nev. 1021 (1998) – Establishes that conversion claims fall under NRS 11.190(3)(c) and are subject to the discovery rule. Bemis provided the primary limitations framework and underscored that discovery tolling ends once the plaintiff knows of the interference.
• Stalk v. Mushkin, 125 Nev. 21 (2009) – Held that intentional interference with contractual relations is also governed by the three-year statute in NRS 11.190(3)(c). The Court analogized it here, making the same clock apply to all asserted torts.
• Clark v. Robison, 113 Nev. 949 (1997) – Articulates the discovery rule’s application to conversion claims. The Court relied on Clark to pinpoint July 27 2019 as the date Valjo indisputably had knowledge of interference.
• Gunderson v. D.R. Horton, Inc., 130 Nev. 67 (2014); MB America, Inc. v. Alaska Pacific Leasing Co., 132 Nev. 78 (2016) – Supply the abuse-of-discretion standard for attorney-fee review, which the Court used to uphold the sanctions.
• Valley Electric Ass’n v. Overfield, 121 Nev. 7 (2005) – Defines “prevailing party,” supporting the fee award to Euphoria.

3.2 The Court’s Legal Reasoning

1. Unified Characterization of Claims. The district court, and the Supreme Court in affirming, treated unjust enrichment and declaratory judgment as derivative of conversion and interference, making NRS 11.190(3)(c)’s three-year limit universally controlling. This avoided piecemeal limitation periods based on artful pleading.
2. Accrual Determination. Applying Clark and the discovery rule, the Court held that accrual occurred when Valjo (a) possessed a cognizable interest (secured creditor) and (b) knew of Euphoria’s adverse possession—facts undeniably present by July 27 2019. The subsequent 2023 stipulation did not create “new” wrongdoing; it merely sought to re-label an existing dispute.
3. Policy Against Circumvention. The Court emphasized that endorsing Valjo’s theory would “allow litigants to circumvent the statute of limitations by simply … making a new assignment of the disputed contract or property.” This policy pronouncement constitutes the decision’s lasting doctrinal contribution.
4. Sanctions for Frivolity. Because Valjo and its counsel were on notice—by public filings and their own 2019 repossession attempt—that the limitations period had elapsed, pursuing the suit was objectively unreasonable. Thus, attorney fees under NRS 18.010(2)(b) were appropriate to deter similar tactics.

3.3 Potential Impact

The ruling resonates in three principal ways:

• Commercial Litigation. Parties can no longer expect to revive stale property or contract torts through internal transfers, stipulations, or “confirmations of judgment.” Transactions crafted to skirt statutes of limitation will likely fail.
• Cannabis Industry & Secured Lending. The decision underscores the importance of prompt enforcement actions—particularly in fast-evolving, asset-heavy sectors like cannabis where equipment ownership can be murky.
• Fee-Shifting Strategy. By affirming sanctions, the Court sends a clear deterrent to litigants contemplating time-bar work-arounds, empowering defendants to seek fees under NRS 18.010(2)(b).

4. Complex Concepts Simplified

• Conversion: A tort where one person intentionally exercises control over another’s personal property, seriously interfering with the owner’s rights.
• Intentional Interference with Contractual Relations: Wrongfully inducing or causing a third party to breach a contract or disrupting the plaintiff’s contractual rights.
• NRCP 12(b)(5) Dismissal: Nevada’s analog to FRCP 12(b)(6); a motion arguing the complaint fails to state a legal claim even if its allegations are accepted as true.
• Discovery Rule: A doctrine pausing (tolling) the statute of limitations until the plaintiff discovers, or should have discovered, the injury and its cause.
• UCC Financing Statement: A public filing that perfects a security interest in collateral, giving notice to third parties.
• Confession of Judgment: A debtor’s written agreement that allows a court to enter judgment against it without typical litigation.
• NRS 18.010(2)(b): Nevada statute authorizing attorney fees when a prevailing party defeats a claim “without reasonable ground,” aiming to punish frivolous litigation.

5. Conclusion

Valjo v. Euphoria Wellness cements a straightforward yet powerful rule: a litigant cannot manufacture a later “ownership” document or internal agreement to restart Nevada’s statute of limitations for conversion or related claims. Accrual hinges on when interference was known, not on how a party subsequently reshapes its legal posture. By coupling that substantive holding with a firm stance on fee-shifting, the Nevada Supreme Court fortifies both procedural integrity and deterrence of opportunistic litigation. Future plaintiffs must act within statutory windows or risk dismissal and financial sanctions, while defendants gain clearer precedent to combat stale claims dressed in new clothes.