Galaxia Wins $11.5M in LED Display Debt Case
Table of Contents
Case Background
Galaxia Electronics Co., Ltd., a Korean corporation, manufactured and distributed LED light displays. Beginning in 2010, Galaxia sold goods to Luxmax U.S.A. and VER, delivering millions of dollars’ worth of products. Despite receiving the goods, Luxmax and VER defaulted on payments. In 2015 and 2016, both entities acknowledged specific sums owed to Galaxia. RWS Management, Inc. also signed agreements assuming Luxmax’s debts.
Cause
In 2016, Scarnechia, operating as POW Productions, allegedly made false promises to pay Galaxia’s debts. Relying on these promises, Galaxia shipped WinVision tiles. RWS failed to pay for the tiles delivered to POW. Galaxia claimed RWS, Scarnechia, and POW conspired to divert funds for their own benefit. Luxmax and RWS ultimately defaulted on payment obligations despite written acknowledgments and assurances.
Injury
Galaxia asserted it suffered significant financial losses due to the defendants’ fraudulent conduct and breaches of contract. These losses included unpaid debts, diverted funds, and expenses incurred while pursuing legal remedies.
Damages
The company sought compensatory and punitive damages, prejudgment and post-judgment interest, and recovery of legal costs. Galaxia claimed the defendants acted willfully and maliciously. As of August 31, 2015, the outstanding debt totaled approximately $14,150,000.
Key Arguments and Proceedings
Legal Representation
Plaintiff(s): Galaxia Electronics Co., Ltd. (a Korean corporation)
Counsel for Plaintiff: Timothy B. Yoo | Alec M. Cronin | Andrew McTernan | Cameron Ryan Partovi (Bird Marella Rhow Lincenberg Drooks and Nessim LLP) | Patricia H. Jun (Mortenson Taggart Adams LLP)
Defendant(s): Luxmax, U.S.A. (a Nevada corporation) | RWS Management, Inc. (a Nevada company) | Daniel Murphy (individual) | Robert Scarnechia (individual) | Full Throttle Films, Inc. (a California company) | POW Productions, LLC
Counsel for Defendants: Daniel W. Bir | Mathew Ryan Groseclose | Noel Scott Cohen (Polsinelli LLP) | Frederic F. Grannis (Stoner Grannis LLP) | Daniel P. Hoffer (Venable LLP) | Matthew M. Gurvitz (Willkie Farr & Gallagher LLP) | David Bricker (Thornton Law Firm LLP) | Robert Scarnechia (Pro Se)
Claims Against the Defendants
Galaxia’s claims included:
Promissory fraud (Luxmax, RWS, Murphy, Scarnechia)
Breach of contract (Luxmax, RWS, Scarnechia)
Conversion (Luxmax, RWS, Murphy, Scarnechia)
Fraudulent inducement (Scarnechia)
Fraudulent misrepresentation (Murphy, Scarnechia)
Aiding and abetting fraudulent misrepresentation (POW Productions)
Common count for quantum valebat (all defendants)
Conspiracy to commit conversion (Scarnechia, RWS, POW Productions)
Tortious interference with contract (Murphy)
Galaxia demanded a jury trial on all relevant issues.
Defense
In response to Galaxia Electronics Co., Ltd.’s Second Amended Complaint, POW Productions, LLC denied all material allegations directed against it, including any claim of participating in a conspiracy with RWS Management and Robert Scarnechia to divert funds from Galaxia. POW asserted that the majority of the claims, including promissory fraud, breach of contract, conversion, and tortious interference, were not brought against it, and noted that the aiding and abetting claim previously asserted had already been dismissed by the Court. POW further denied liability for the remaining claims, including fraudulent misrepresentation, quantum valebat, and conspiracy to commit conversion.
POW also raised multiple affirmative defenses, arguing that the complaint failed to state a claim, lacked the required particularity for fraud allegations, and was barred in whole or in part by the statute of limitations, lack of causation, failure to mitigate damages, equitable doctrines, consent, waiver, estoppel, mistake, unclean hands, and constitutional limits on punitive damages. It also challenged the Court’s personal jurisdiction over it and asserted that Galaxia failed to join necessary parties. POW sought dismissal of the claims with prejudice, recovery of its litigation costs and attorney’s fees, and any further relief deemed appropriate by the Court.
Judgement
On July 2, 2025, the U.S. District Court for the Central District of California entered final judgment in Galaxia Electronics Co., Ltd. v. Luxmax, U.S.A., et al. Following prior rulings, a jury found in favor of defendant Daniel Murphy on Galaxia’s sole remaining claim for promissory fraud, dismissing all claims against him on the merits. However, pursuant to earlier judgments, Galaxia was awarded $11,588,000.20 in compensatory damages, $238,319.30 in attorney’s fees, and over $11.3 million in pre-judgment interest against Luxmax, RWS Management, and Robert Scarnechia (RWS’s alter ego), with liability apportioned jointly and severally as specified. Post-judgment interest at 5.38% applies, and all other relief was denied, fully disposing of all claims and parties.
Court Documents
Court documents are availale for purchase upon request at Jurimatic@exlitem.com