Consipio Holding, BV v. Carlberg, 128 Nev. Adv. Op. 43 (Aug. 9, 2012)

Before the Court en banc. Opinion by Justice Gibbons.
This action arose out of a dispute between a Nevada corporation and its non-resident officers and directors. Several shareholders of Private Media Group, Inc. (PRVT), a corporation that is incorporated in Nevada with its principle place of business in Spain, brought derivative claims against several officers and directors of PRVT who were all residents of European nations. Only three of the defendants had ever been to Nevada previously, one visited to consult with his attorneys in preparation for this lawsuit, and the others had been to Nevada several years previously for purely personal reasons. The defendants moved to dismiss the case for lack of personal jurisdiction, and the district court granted the motion and certified the dismissal orders as final under NRCP 54(b). The court reversed the district court’s orders, and held that a district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation. The Court reached this conclusion by examining its previous jurisprudence on personal jurisdiction, including Trump v. Dist. Ct., 109 Nev. 687 (1993), and held that because a corporation that is incorporated in Nevada is a Nevada citizen, when officers or directors directly harm a Nevada corporation, they are harming a Nevada citizen and therefore purposefully directing their conduct toward Nevada. The court also found support in NRS 78.135(1) for the exercise of personal jurisdiction, holding that because that statute authorizes lawsuits against officers or directors of a Nevada corporation for violation of their authority, those officers and directors are on notice that they could be subject to a derivative suit under Nevada’s laws. The court also addressed Respondents’ argument that the fiduciary shield doctrine should apply, noting that the fiduciary shield doctrine does not apply in Nevada because Nevada’s long-arm statute extends to the limits of due process. Finally, the court noted that while the district court held hearings on the motions and ultimately concluded that an individual’s position as a Nevada corporation’s director does not automatically subject them to jurisdiction in Nevada, the district court needed to conduct further factual analysis in order to determine whether the Respondents’ specific conduct in this case subjected them to jurisdiction in Nevada. Vacated and remanded for further proceedings. (Megan L. Starich, Associate in the Reno office of McDonald Carano Wilson LLP).

Weddell v. H2O, Inc., 128 Nev. Adv. Op. 9 (March 1, 2012)

Before Justices Saitta, Cherry, and Gibbons. Opinion by Justice Cherry.
In this appeal, the Court addressed the scope of rights of a judgment creditor holding a charging order and the scope of NRS chapter 14 regarding the filing of a lis pendens. After setting forth a brief history of LLCs and the purposes for which they were created, the Court concluded that the holder of a charging order only obtains the rights to any distribution or return of contributions to which the judgment debtor/member would have been entitled. The holder of a charging order does not obtain any managerial authority and cannot reach the assets of the LLC. The Court implicitly approved an involuntary transfer provision in the operating agreement that transferred appellant’s interest in the LLC to the other members upon the service of the charging order. Appellant had filed a lis pendens regarding an option agreement to purchase a membership interest in an LLC. The Court affirmed the district court’s cancellation of the lis pendens since the complaint did not directly involve the resolution of an issue involving real property. Affirmed in part, reversed in part, and remanded. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Canarelli v. Dist. Ct., 127 Nev. Adv. Op. 72 (November 10, 2011)

Before the Court en banc. Opinion by Hardesty.
In this petition for a writ of mandamus, the Nevada Supreme Court considered whether a district court may appoint an unwilling director trustee of a dissolved corporation to defend post-dissolution claims against the corporation that arose after the conclusion of the winding-up process. The Court first determined that the continued legal existence of a corporation for the purpose of adjudicating a post-dissolution claim against it is separate from the obligations of its directors trustees to wind up the corporate affairs. With that premise in mind, the Court examined Nevada’s statutory corporate dissolution scheme and concluded that, while claimants may bring post-dissolution claims, directors trustees have no duty to defend against those claims once the directors trustees have completed winding up the affairs of the corporation. In a footnote, the Court recognized the difficulty presented by the apparent conflict between this decision and Beazer Homes Nevada, Inc. v. Dist. Ct., 120 Nev. 575, 584, 97 P.3d 1132, 1138 (2004), which allowed post-dissolution claims to be brought against corporations if the claim was brought within the relevant statute of limitations or statute of repose. The Court stated that the conflict must be resolved by the legislature and was not a proper subject for determination by the courts. Petition granted. (Seth T. Floyd, Associate in the Las Vegas office of McDonald Carano Wilson).