Wills v. Collins Capital, LLC: Clarifying Nevada Courts’ Power to Impose Case-Terminating Discovery Sanctions Without an Evidentiary Hearing

Introduction

Wills v. Collins Capital, LLC, decided by the Supreme Court of Nevada on 18 June 2025, arises from the breakdown of a COVID-19 testing start-up (“Xymbio”) jointly founded by Heath and Patricia Wills (through their entities) and investment partners (the “Helix Parties”). When the Helix Parties sued in April 2020 for fraud, conversion, and related torts, the district court repeatedly sanctioned the Wills Parties for discovery abuses, ultimately striking their pleadings and entering default (the quintessential “case-terminating sanction”). A prove-up hearing followed, resulting in a $3.53 million judgment ($860k compensatory, $1.7 m punitive, remainder prejudgment interest). On appeal, the Wills Parties challenged:

The absence of an evidentiary hearing before the case-terminating sanction;
The admission of allegedly late-disclosed evidence and expert testimony at the prove-up proceeding;
The propriety of punitive damages.

The Helix Parties cross-appealed, arguing that the trial court erroneously denied lost-profit damages. The Supreme Court affirmed in full, forging a nuanced precedent on when Nevada trial courts must hold an evidentiary hearing before imposing the litigation “death penalty.”

Summary of the Judgment

Case-Terminating Sanctions: Affirmed. An evidentiary hearing is not required where no genuine factual disputes exist concerning the Young v. Johnny Ribeiro Building, Inc. factors.
Prove-Up Hearing Procedure: Affirmed. After default, the district court exercises broad discretion under NRCP 55(b)(2); challenges to late disclosures under NRCP 16.1/37 come too late once default is entered, and limited cross-examination satisfied due-process concerns.
Punitive Damages: Affirmed. NRCP 54(c) limits default judgments to the kind and amount demanded in the pleadings—not in interim disclosures. Because punitive damages were pleaded and the award did not exceed the ad damnum, the award stands.
Lost-Profit Damages (Cross-Appeal): Affirmed. The trial court did not abuse discretion in deeming the expert’s estimates too speculative for a brand-new venture.

Analysis

1. Precedents Cited and Their Influence

Young v. Johnny Ribeiro Building, Inc., 106 Nev. 88 (1990) — Established eight-factor test for case-terminating discovery sanctions. Wills refines procedural application: where facts are undisputed, an evidentiary hearing is unnecessary.
Nevada Power Co. v. Fluor Illinois, 108 Nev. 638 (1992) — Required evidentiary hearing if factual disputes exist. Wills distinguishes the scenario when disputes are facially absent.
Bahena v. Goodyear Tire & Rubber Co., 126 Nev. 243 (2010) — Announced a “heightened” appellate scrutiny for case-terminating sanctions. Wills applies that scrutiny yet still affirms.
Foster v. Dingwall, 126 Nev. 56 (2010) & Hamlett v. Reynolds, 114 Nev. 863 (1998) — Confirm trial courts’ broad discretion in default prove-up hearings; used to uphold late disclosures and procedure below.
Frantz v. Johnson, 116 Nev. 455 (2000) and Houston Exploration v. Meredith, 102 Nev. 510 (1986) — Governing standards for speculative damages; undergird denial of lost profits.
Eaton v. J. H. Inc., 94 Nev. 446 (1978) — Reasonable-certainty rule for lost profits, reaffirmed.
Casey v. Wells Fargo Bank, 128 Nev. 713 (2012) — De novo review for district-court interpretations of procedural rules, guiding appellate review of punitive-damages issue.

2. Legal Reasoning Explained

a) Case-Terminating Sanctions

The district court meticulously documented repeated, willful discovery abuses: ignoring orders, partial payment of monetary sanctions, and misuse of entity funds. Because those facts were uncontested (supported by receiver findings and the Wills Parties’ own payment record), the Supreme Court held no “issues of fact” remained for an evidentiary hearing under Nevada Power. The Court emphasized that public policy favoring merits adjudication wanes when evidence is intentionally withheld.

b) Prove-Up Hearing Procedure

Under NRCP 55(b)(2), once default is entered the proceeding shifts from liability to damages. Citing Foster and Hamlett, the Court reiterated that the defaulting party’s participatory rights rest in the trial judge’s discretion. The ten-day pre-hearing disclosure of witnesses and documents—though arguably late under NRCP 16.1—did not mandate exclusion because:

Discovery was “closed” upon default; and
The Wills Parties were still permitted to cross-examine, satisfying due process.

c) Punitive Damages After Default

NRCP 54(c) is the lodestar: a default judgment cannot “differ in kind” or “exceed in amount” the pleadings’ demand. The Helix Parties’ complaint explicitly requested punitive damages “in an amount to be proven at trial.” Therefore, punitive damages were duly noticed, irrespective of omission in later disclosures. Because $1.7 million was less than the undefined cap pleaded, the award was within rule.

d) Lost-Profit Damages

Lost profits must be proved to a “reasonable certainty.” The district court found the expert’s testimony speculative for a nascent company lacking operating history, and the Supreme Court deferred to that credibility determination under the abuse-of-discretion standard from Frantz.

3. Potential Impact of the Decision

Discovery Practice: Litigants in Nevada face a clearer threat of immediate case-terminating sanctions if violations are undisputed. Defense counsel can no longer rely on a guaranteed evidentiary hearing as a procedural safeguard.
Judicial Economy: Trial courts may conserve resources by bypassing hearings when Young factors are plainly satisfied.
Pleadings Draftsmanship: Plaintiffs should expressly plead every category of damages (including punitive) to preserve post-default recovery.
Damages Proof: For start-ups and new ventures, expert testimony on lost profits must be grounded in solid, non-speculative comparators; otherwise, courts may deny that component entirely.
Default Prove-Up Dynamics: After default, discovery obligations change. Parties must object before default, or risk forfeiture of NRCP 16.1/37 arguments.

Complex Concepts Simplified

Case-Terminating Sanctions: The harshest penalty a court can impose for discovery abuse: striking pleadings or entering default, effectively deciding the case against the offending party.
Young Factors: Eight criteria guiding whether dismissal/default is appropriate, including willfulness, prejudice, lesser sanctions, and public policy.
Prove-Up Hearing: A post-default proceeding where the plaintiff must “prove up” (i.e., substantiate) the amount of damages.
NRCP 54(c): Nevada Rule of Civil Procedure limiting default judgments to the relief requested in the complaint.
Reasonable Certainty (Lost Profits): A standard requiring damages to be supported by factual data enabling a non-speculative calculation.

Conclusion

The Supreme Court’s affirmation in Wills v. Collins Capital crystallizes several procedural doctrines in Nevada civil litigation. Most notably, it confirms that a trial court need not hold an evidentiary hearing before imposing case-terminating sanctions when the material facts underlying the Young factors are uncontroverted. Complementing that principle, the decision underscores the broad discretion courts wield in default prove-up hearings, the importance of pleading all categories of damages, and the evidentiary rigor demanded for speculative claims such as lost profits in start-ups. Collectively, Wills strengthens judicial tools to sanction discovery misconduct, streamlines post-default procedure, and provides litigants with concrete guidance on pleading and proof, thereby shaping Nevada’s civil-procedure landscape for years to come.