Southern Wine & Spirits awarded $1.1 million in punitive damages

An eight-person jury on Thursday awarded giant distributor Southern Wine & Spirits of America Inc. nearly $1.1 million in punitive damages against two other companies that infringed upon several exclusive distribution deals, wrapping up a trial that began nearly a month ago.

Damages were awarded after a Clark County District Court jury found last week that Southern Wine had incurred economic losses of $199,000 because of Transat Trade Inc. and Chateau Vegas Wine Inc. improperly selling in Nevada three pricey champagne brands and a dozen Bordeaux wines dating back to 2002.

This amount grew to $377,000 after two out of three counts included treble damages prescribed by state law.

In addition, a marketing arm of Cristal champagne maker Louis Roederer won $463,000 in punitive damages on top of the $69,000 in lost profits.

During followup motions next month, Southern Wine attorney E. Leif Reid will ask to add more than $6.5 million in legal bills to the final judgment, covering several law firms involved in a case now more than a decade old.

If granted, that would push the final burden on Transat and Chateau Vegas, owned by Los Angeles-area importer and distributor Guy Azera, past $8 million.

“We are pleased with the result of the jury,” Reid said. “We think that the verdict sends an appropriate message to all those who choose to violate Nevada liquor law.”

Clark County District Judge Mark Denton ruled in 2008 that Azera’s companies had violated exclusivity agreements Southern Wine had for the wines and champagnes, which also included Dom Perignon and Vueve Cliquot. He was upheld three years later by the Nevada Supreme Court.

Azera attorney R. Duane Frizell declined to comment on the ruling. But during the final stages of the trial, he objected to more than two dozen of the instructions given to the jury about how to formulate a verdict, a move that often forms part of an appeal.

“We are examining all our options,” he said.

During Wednesday’s closing arguments for the punitive phase, Reid depicted Azera as having repeatedly lied about his business dealings in the state and having destroyed critical evidence to reduce the financial harm.

Frizell said Azera had relied on professional advice at every turn and took remedial steps when this turned out wrong.

Both sides also added an emotional element.

Reid at times highlighted the locally prominent Larry Ruvo, Southern Wine’s senior managing director for Nevada. About two dozen company employees packed half the courtroom gallery for both the first and second phase closings.

During the punitive arguments, Azera’s wife and three children attended.

However, juror Jenny Patterson said, “To me, it didn’t matter because I saw it for the theater that it was.”

More important, she said, was that Azera obtained his liquor through the gray market, a legal channel outside the official distribution system.

After experiencing the recession as someone who helps create audio and visual effects for special events, Patter­son emphasized protecting the visitor industry’s integrity.

“I thought it was important to concentrate on that moving forward,” she said.

Contact reporter Tim O’Reiley at
toreiley@reviewjournal.com or 702-387-5290.