Sandpointe Apts. v. Eighth Jud. Dist. Ct., 129 Nev. Adv. Op. 87 (Nov. 14, 2013)

Before the Court en banc. Opinion by Justice Saitta. Justices Cherry and Parraguirre dissented.
In this writ petition, the Court held that NRS 40.459(1)(c), which was added to Nevada’s law by Assembly Bill 273, may not apply retroactively to limit the amount of a deficiency judgment that can be recovered by persons who acquired the right to obtain the judgment from someone else who held that right. The protections of NRS 40.459(1)(c) are therefore only applicable to judicial foreclosures or trustee’s sales occurring on or after the effective date (June 10, 2011) of the statute. Petitioner Sandpointe Apartments, LLC (“Sandpointe”) received a loan from Silver State Bank in 2007 for the construction of an apartment complex. The loan was secured via a deed of trust on the real property and backed by a personal guarantee from Petitioner Stacy Yahraus-Lewis. Silver State Bank closed in 2008 and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver. After Sandpointe had already defaulted on its loan in 2009, the FDIC sold the loan and personal guarantee to Multibank, which then transferred its interest in the loan and guarantee to its wholly owned subsidiary, real party in interest, CML-NV Sandpointe, LLC (“CML-NV”). In early 2011, CML-NV foreclosed on Sandpointe’s loan and purchased the real property securing the loan at a trustee’s sale. Subsequently on June 10, 2011, the Governor signed Assembly Bill 273 into law, which had been unanimously passed by the Nevada Legislature. The relevant provision, codified as NRS 40.459(1)(c), provides that if “the person seeking the [deficiency] judgment acquired the right to obtain the judgment from a person who previously held that right,” then the person seeking the deficiency judgment may only recover “the amount by which the amount of the consideration paid for that right exceeds the fair market value of the property sold at the time of sale or the amount for which the property was actually sold, whichever is greater, with interest from the date of sale and reasonable costs.” CML-NV filed a complaint against Sandpointe and Yahraus-Lewis for deficiency and breach of guaranty on June 27, 2011. At a hearing on cross-motions for summary judgment, the district court concluded that NRS 40.459(1)(c) only applies to loans entered into after June 10, 2011. Thereafter, Sandpointe and Yahraus-Lewis petitioned the Supreme Court for a writ of mandamus or prohibition directing the district court to apply NRS 40.459(1)(c) to CML-NV’s deficiency judgment. Nevada statutes are presumed to operate only prospectively unless the Legislature clearly manifests an intent to apply the statute retroactively or it clearly appears from the statute itself that the Legislature’s intent cannot be implemented in the absence of retroactivity. A statute has retroactive effect when it takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past. The Court held that the right to a deficiency judgment is a vested right as of the date of a trustee’s sale, which is when the amount of a deficiency is fixed. Related statutes, such as NRS 40.462(1), provide that the right to receive proceeds from a foreclosure sale vests at the time of the sale. Thus, the Court found it logical that the right to a judgment for the amount not received in a foreclosure sale would arise, and vest, on the same date as the right to receive amounts received from the sale. Applying NRS 40.459(1)(c) to deficiencies arising from sales prior to the enactment of the statute would affect vested rights and therefore would have an impermissible retroactive effect. An investigation into legislative intent was considered unwarranted by the majority as NRS 40.459(1)(c)’s provision that it becomes effective upon passage and approval is plain and unambiguous. Even if legislative history were consulted though, the majority noted that the author of Assembly Bill 273 stated on several occasions that the legislation could not be applied retroactively. Moreover, the presumption against retroactivity was not considered rebutted simply because the statute would have a broader impact if applied to transactions prior to 2011 as prospective application could still accomplish the legislative intent with respect to many loans. The Court rejected Petitioners’ argument that NRS 40.459(1)(c) is not retroactive because the statute merely clarifies existing law. Although another statute, NRS 40.451, limits a lien amount to the amount of consideration paid, the Court noted that the lien amount is only one factor determining the total amount of indebtedness, which is the figure used to determine the deficiency judgment amount. Additionally, the Court distinguished NRS 40.459(1)(c) as applicable to guarantors unlike NRS 40.451. Justices Cherry and Parraguirre dissented from the majority holding and would have granted the writ petition on the basis that the real party in interest had not yet obtained a deficiency judgment. The dissent argued that NRS 40.459(1)(c) applies at the time that a deficiency judgment is lawfully obtained and that until such judgment, a creditor only has a contingent remedy for potential deficiency and not a vested right. The dissent found persuasive the statement in the Legislative Counsel Digest that the provisions of Assembly Bill 273 would “apply to a deficiency judgment awarded on or after” the effective date and the Legislature’s corresponding declaration in its amicus curiae brief that it intended NRS 40.459(1)(c) to apply to every deficiency judgment awarded on or after the effective date. Noting the policy rationales of stopping profiteering activities and ensuring fairness to all parties to a transaction secured by realty, the dissent criticized the majority opinion for ignoring these objectives and denying protection to borrowers and guarantors who were the intended beneficiaries of the legislation. Petition denied. (Adam Hosmer-Henner, Associate in the Reno office of McDonald Carano Wilson.)

Markowitz v. Saxon Special Servicing, 129 Nev. Adv. Op. 69 (Oct. 3, 2013)

Before the Court en banc. Opinion per curiam.
In this appeal, the Court addressed the requirement of Nevada Foreclosure Mediation Program Rule 8(3)-(4) (now renumbered as Rule 11) that a deed-trust beneficiary provide an appraisal or broker’s price opinion prepared “no more than 60 days before the commencement date of the mediation,” and the authority of a servicer to attend mediation on behalf of the beneficiary of the deed of trust. In this case, the Markowitzes elected to attend mediation; Saxon Special Servicing (“Saxon”), the servicer for the deed-trust beneficiary, represented the beneficiary at mediation. Saxon provided an 83-day-old broker’s price opinion (BPO). The Markowitzes petitioned for judicial review of the mediator’s decision to issue a certificate allowing for foreclosure, arguing that Saxon failed to strictly comply with the BPO requirement and was not authorized to mediate on behalf of the beneficiary. On review, the District Court refused to withhold the certificate, finding that neither party acted in bad faith. The Markowitzes appealed. On appeal, the Court determined that a deed-trust beneficiary must strictly comply with the requirement to produce a BPO, but that substantial compliance could satisfy the content-based rule regarding the age of the BPO. As such, the Court held that without a demonstration of prejudice to the Markowitzes from the 83-day-old appraisal, Saxon substantially complied with the rule. Additionally, the Court held that a servicer can validly represent a beneficiary at foreclosure mediation. Affirmed. (David Stoft, Associate in the Las Vegas office of McDonald Carano Wilson.)

Nevada Power Co. v. 3 Kids, L.L.C., 129 Nev. Adv. Op. 47 (July 3, 2013, opinion modified by Court order July 24, 2013)

Before the Court en banc (Chief Justice Pickering recused). Opinion by Justice Gibbons.
In this opinion, the Court held that a jury instruction based on an overbroad reading of its decision in City of North Las Vegas v. Robinson, 122 Nev. 527, 134 P.3d 705 (2006) was not prejudicial because a separate jury instruction remedied the error. The action at district court was a jury trial regarding the just compensation for a taking by Appellant of a portion of Respondent's property for a utility easement. The jury was instructed to disregard the existence of a setback along the northernmost 20 feet of the subject property for purposes of calculating the value of the property. Appellant objected to this instruction, but the district court overruled the objection based on Respondent's argument that the Robinson decision, which addressed the applicability of a property's highest and best use in the calculation of value, was broad enough to encompass the instruction. The Court held that the instruction to disregard the setback was beyond the scope of Robinson because setbacks are appropriate for a jury to consider in discounting value. However, the Court also held that a separate, more thorough instruction alleviated the error by correctly interpreting Robinson, and therefore that there was no prejudice to Appellant caused by the erroneous instruction. Additionally, the jury's verdict was supported by substantial evidence. The Court offered a sample jury instruction for cases where a jury must determine just compensation for a property burdened by a use restriction without disregarding its highest and best use. A second issue before the Court was whether the district court abused its discretion by allowing testimony from Respondent's expert. The Court determined that the alleged weaknesses in the expert report went to the weight of the evidence and not its admissibility. The Court observed that Appellant had ample opportunity to address these weaknesses and therefore that the district court did not abuse its discretion by allowing the testimony. Appellant's argument that the expert's analysis violated NRS 50.285 was likewise unfounded because the statute does not define the type of documentation or data upon which an expert may rely. Affirmed. (Mark W. Dunagan, Associate in the Reno office of McDonald Carano Wilson LLP.)

Halcrow, Inc. v. Eighth Jud. Dist. Ct., 129 Nev. Adv. Op. 42 (June 27, 2013)

Before the Court En Banc. Opinion by Justice Saitta.
In this petition for writ of mandamus challenging a district court order granting motions for leave to amend to add claims for negligent misrepresentation against a design professional in the commercial construction context, the Court examined the economic loss doctrine’s applicability to negligent misrepresentation claims. The Court had previously left open the question of whether the economic loss doctrine barred a claim for negligent misrepresentation in Terracon Consultants Western, Inc. v. Mandala Resort Group, 125 Nev. 66, 206 P.3d 81 (2009). The original proceeding in this case stemmed from the construction of the Harmon Tower within CityCenter. The developer, MGM Mirage Design Group (“MGM”), retained an architectural firm and Perini Building Company (“Perini”) as its general contractor. The architectural firm retained the petitioner, Halcrow, to design the Harmon’s structure, and Perini hired Century Steel, Inc. (“Century”) to provide the steel installation, who ultimately assigned its assets to Pacific Coast Steel (“PCS”). Halcrow had no contract with Perini, Century, or PCS. After Perini filed a complaint against the MGM for failing to make timely payments, the MGM filed counterclaims against Perini for alleged reinforcing steel defects and other nonconforming work. Perini then filed a third-party complaint against Century and PCS, who in turn filed their own third and fourth party complaints against Halcrow, among others. Halcrow moved to dismiss Century’s third and fourth party complaints, arguing that Terracon bars unintentional tort claims against design professionals in commercial construction projects when the claimant incurs primarily economic losses. The district court dismissed Century’s and PCS’s claims for negligence, among others, but allowed Century and PCS leave to amend to allege a claim for negligent misrepresentation against Halcrow for allegedly negligently representing to Century and PCS that it would inspect and make on-site adjustments to the steel installation. The Court exercised its discretion to review this writ petition, and examined the economic loss doctrine’s application in Nevada. The Court clarified that there are certain exceptions to the economic loss doctrine where “strong countervailing considerations weigh in favor of imposing liability,” including claims for “defamation, intentionally caused harm, negligent misstatements about financial matters and loss of consortium.” However, the Court reasoned that in the context of commercial construction design professionals, contract law is better suited for resolving such claims. Therefore, the Court held that in commercial construction defect litigation, the economic loss doctrine applies to bar claims against design professionals for negligent misrepresentation where the damages alleged are purely economic. Writ of mandamus granted directing district court to vacate its order granting Century and PCS leave to amend. (Megan Starich, Associate in the Reno office of McDonald Carano Wilson LLP).

Bergenfield v. Bank of Am., 129 Nev. Adv. Op. 40 (June 6, 2013)

Before Justices Gibbons, Douglas, and Saitta. Opinion by Justice Douglas.
In this appeal, the Court held that in the context of Nevada’s Foreclosure Mediation Program, when the deed of trust to real property and the promissory note are held by two different entities at the time of mediation, the attendance at the mediation by the holder of a promissory note does not meet the statutory requirement that the deed of trust beneficiary attend and participate in good faith. Appellant obtained a home loan from Countrywide Home Loans, Inc. and executed a promissory note in Countrywide’s favor. The note was secured by a deed of trust naming Mortgage Electronic Registration Systems, Inc. as beneficiary of the deed of trust, who subsequently assigned its interest in the deed of trust to HSBC Bank USA. Countrywide endorsed the promissory note in blank, which meant that the holder of the note would be entitled to payment under the terms of the note. The Appellant defaulted on the loan and elected to participate in the Foreclosure Meditation Program. Bank of America, the acquirer of Countrywide, held the note and, through a representative, attended the mediation. HSBC did not attend at all. The Court held that a party seeking a nonjudicial foreclosure on a deed of trust of an owner-occupied residence must demonstrate that it is the current beneficiary of the deed of trust and the holder of the promissory note. This is because the deed of trust is a lien on the property, but the holder of the promissory note is the party entitled to repayment. Foreclosure under NRS Chapter 107 is only proper when the deed of trust and the promissory note are held by the same party. NRS 107.086(4) requires that the beneficiary of the deed of trust attend the mediation, and the Foreclosure Mediation Program certificate, which ultimately permits the beneficiary to proceed with foreclosure, cannot be issued if the beneficiary fails to attend. The deed of trust and the promissory note, therefore, must be reunified prior to the mediation. Because Bank of America was not the beneficiary of the deed of trust, it was not permitted to nonjudicially foreclose on the property. The Court further issued sanctions against Bank of America for holding itself out as the beneficiary of the deed of trust. Reversed. (Joseph Schrage, Associate in the Las Vegas office of McDonald Carano Wilson LLP.)

Chapman v. Deutsche Bank Nat'l Trust Co., 129 Nev. Adv. Op. 34 (May 30, 2013)

Before the Court En Banc. Opinion by Chief Justice Pickering.
In this matter, in which the Ninth Circuit Court of Appeals certified two questions to the Nevada Supreme Court, the Court considered whether the following actions are properly characterized as proceedings in personam (in which a judgment acts only upon the parties to the suit), in rem (a proceeding taken directly against property, in which a judgment applies against the entire world), or quasi in rem (a proceeding to determine rights in certain property; i.e., “a halfway house between in rem and in personam proceedings): 1) a quiet title action under NRS 40.010, which is premised on an allegedly invalid trustee’s sale under NRS 107.080(5)(a); and 2) an unlawful detainer action under NRS 40.255(1)(c). The Court concluded that a quiet title action is “predominately in rem or quasi in rem,” because its primary purpose was to establish title to real property. In so holding, the Court rejected Deutsche Bank’s argument that a quiet title action in which the plaintiff also seeks monetary damages changes the nature of the proceeding to an in personam proceeding. The Court also concluded that although an unlawful detainer action “does not adjudicate title or an absolute right to possession of property,” an unlawful detainer action is nevertheless a proceeding in rem or quasi in rem because its purpose is to determine rights to possession – a lesser property interest than title, but a property interest nonetheless – as between a plaintiff and a defendant. Having so concluded, the Court answered the certified questions in the affirmative. (Patrick J. Murch, Associate in the Las Vegas office of McDonald Carano Wilson.)

Galardi v. Naples Polaris, LLC, 129 Nev. Adv. Op. 33 (May 16, 2013)

Before Chief Justice Pickering, Justices Hardesty and Saitta. Opinion by Chief Justice Pickering.
In this appeal, the court examined Nevada law on contract interpretation in determining whether a real estate option contract required the buyer or the seller to remove an encumbrance on the property subject to the contract upon the sale. At issue on appeal was whether the district court properly considered evidence of trade usage to determine that the contract was unambiguous and, therefore, exclude parol evidence. The Court adopted the modern standard regarding trade usage and held that ambiguity in a contract is not required before evidence of trade usage or custom can be used to ascertain or illuminate contract terms. Applying this principle, the Court found that the district court properly deemed an expert’s affidavit regarding trade usage admissible and that the option contract was unambiguous in light of the trade usages established by the expert affidavit. The Court further determined that the seller’s deposition testimony regarding his subjective understanding of the contract’s terms was inadmissible under the parol evidence rule because it contradicted the contract’s express terms, and that the testimony was not relevant to contradict the expert’s testimony on industry usage and custom. Because the seller’s testimony was either inadmissible or irrelevant or both, the Court held it was insufficient to create a genuine issue of material fact to defeat summary judgment, affirming the district court’s grant of summary judgment. Affirmed. (Megan Starich, Associate in the Reno office of McDonald Carano Wilson LLP.)

Jacinto v. PennyMac Corp., 129 Nev. Adv. Op. 32 (May 2, 2013)

Before Justices Gibbons, Douglas, and Saitta. Opinion by Justice Douglas.
In this appeal from a petition for judicial review of a foreclosure mediation, the Court considered whether a homeowner who obtained some relief but not all the requested relief is an aggrieved party with standing to appeal. Under a NRAP 3A, to have standing to appeal, a party must be “aggrieved”, meaning adversely and substantially affected by a challenged judgment. In this opinion, the Court makes clear that a party who receives an order granting some requested relief but denying other relief may be considered aggrieved under NRAP 3A. Addressing the substance of the appeal, the Court held that the district court did not abuse its discretion when it granted only monetary sanctions for the lender’s failure to comply with the foreclosure mediation rules. Affirmed. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Majuba Mining, Ltd. v. Pumpkin Copper, Inc., 129 Nev. Adv. Op. 19 (Apr. 4, 2013)

Before Justices Hardesty, Parraguirre and Cherry. Opinion by Justice Cherry.
This appeal arose out of a district court order in an action to quiet title, in which the district court apparently held that Pumpkin Copper’s title to certain unpatented federal mining claims was superior to Majuba Mining’s title. Sometime after Majuba Mining initiated the appeal, the Bureau of Land Management determined that Majuba Mining had forfeited the mining claims because it failed to pay the annual claim maintenance fees required under federal law. Accordingly, because Majuba Mining no longer had an interest to protect in a quiet title action, the legal controversy regarding superior title that had existed at the beginning of the litigation was no longer at issue. Dismissed as moot. (Patrick Murch, Associate in the Las Vegas office of McDonald Carano Wilson).

Holcomb Condo. HOA v. Stewart Venture, 129 Nev. Adv. Op. 18 (April 4, 2013)

Before Chief Justice Pickering and Justices Hardesty and Saitta. Opinion by Justice Hardesty.
In this appeal from a 12(b)(5) motion to dismiss, the Court addressed the validity of a contractual provision shortening the statute of limitations to make claims for construction defects. In particular, the Court examined the requirements of NRS 116.4116, which allows parties to agree to shorten the limitations period from six years to no less than two years for breach of warranty claims involving residential common-interest communities, so long as the parties’ agreement is memorialized in a “separate instrument.” The Court joined numerous other jurisdictions in holding that in general, parties may agree to shorten a statutory limitations period, so long as that agreement does not contradict any other statute, and so long as the agreed-upon period is reasonable and does not violate public policy. A limitations period will be considered unreasonable if it “effectively deprives a party of the reasonable opportunity to vindicate his or her rights.” The Court concluded, however, that the district court erred in finding that the arbitration agreement at issue in this case was a “separate instrument” under NRS 116.4116, since the agreement expressly stated that it was part of the purchase contract, and the purchase contract also expressly stated that the arbitration agreement was incorporated into the contract. Finally, the Court held that the district court erred when it dismissed Appellant’s negligence claims as time-barred, since NRS 116.4116 pertains only to breach of warranty claims. Reversed and remanded. (Jeff S. Riesenmy, Associate in the Las Vegas office of McDonald Carano Wilson).

Sowers v. Forest Hills Subdivision, 129 Nev. Adv. Op. 9 (Feb. 14, 2013)

Before Chief Justice Pickering and Justices Hardesty and Saitta. Opinion by Justice Hardesty.
In this appeal from a permanent injunction barring the construction of a residential wind turbine, the Court affirmed the district court’s finding that the turbine was a nuisance in fact. The Court clearly rejected the argument that a residential wind turbine could be a nuisance in law, citing public policy and county codes permitting their construction. The Court recognized, however, that a residential wind turbine could be a nuisance in fact if the harm of the proposed construction outweighed its societal value. The factors that the Court considered in evaluating the adverse impact included the noise generated by the turbine and harm to neighborhood property values. The Court held that the aesthetics of a wind turbine alone cannot be the harm evaluated in a nuisance analysis, but courts can consider aesthetics if factors in addition to unsightliness or obstruction of view are alleged. In this case, the negative aesthetics of shadow flicker and the size of the wind turbine, in combination with the noise and diminution in neighborhood property values, constituted an adverse impact that far outweighed the potential utility of the turbine. The Court emphasized that the utility of the wind turbine was limited because only the one homeowner would benefit from its construction. Concluding that substantial evidence existed in the record to support the district court’s findings on all of those points, the Court affirmed the permanent injunction. Affirmed. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Building Energetix Corp. v. EHE LP, 129 Nev. Adv. Op. 6 (Feb. 14, 2013)

Before Chief Justice Pickering and Justices Hardesty and Cherry. Opinion by Chief Justice Pickering.
In this appeal, the Court considered two issues: (1) the validity of a nonjudicial foreclosure sale when a delinquent-tax certificate or a tax deed encumbers the property; and (2) the ability of the purchaser of such property at the foreclosure sale to redeem the property from a county treasurer. The Court held that a delinquent-tax certificate does not prevent nonjudicial foreclosure because ownership of a property does not transfer when a delinquent-tax certificate issues. Ownership does not even transfer after the two-year statutory period passes without redemption of the property and a county treasurer issues a tax deed of the property. Rather, ownership of a property encumbered by a delinquent-tax certificate or a tax deed remains with the parties who otherwise hold an interest in the property. That interest does not extinguish until “the county gives notice of sale or otherwise finally disposes of the property.” The Court then held that a party who purchases a property at foreclosure sale may redeem it from a county treasurer. The Court clarified that the language in NRS 107.080(5), which states that the purchase at a nonjudicial foreclosure sale is without the right of redemption, prevents a debtor from exercising a right of redemption against the purchaser, not a purchaser from later redeeming the property from the county. Affirmed. (Chris Stanko, Summer Law Clerk in the Reno office of McDonald Carano Wilson.)

Las Vegas v. Cliff Shadows Prof'l Plaza, 129 Nev. Adv. Op. 2 (January 31, 2013)

Before the Court en banc. Opinion by Justice Saitta.
In this appeal, the Court dealt with two issues: 1) whether land in question was subject to an easement that the City was entitled to use; and 2) whether the City’s use constituted a taking. In 1956, the federal Bureau of Land Management (“BLM”) conveyed property by patent “subject to a right-of-way not exceeding 33 feet in width, for roadway and utility purposes.” In 2008, the City designated a 40-foot-wide strip of the property for use in the Cliff Shadows Parkway Improvement Plan. The City planned to use the 33 feet of right-of-way plus an additional 7 feet. The 33-foot easement was the subject of the takings analysis. The district court found that the City was not entitled to use the easement because it was not specifically named in the federal land patent. The district court also determined that the City’s use of the easement constituted a taking and that the easement should be disregarded when calculating just compensation, awarding full market value to the property owner. The Nevada Supreme Court reversed based on its interpretation of the language of the grant and the interpretation of similar language from other jurisdictions, determining that the language of the land patent did create an easement that the City could use. The use of the term “right-of-way” refers to an easement, and the use of “subject to” creates that easement. The Court further stated that any ambiguities in federal land patents are construed in favor of the government. The Court further found that the City’s use of the property was within the scope of the easement, although the interpretation of an easement is strictly construed in favor of the landowner. The property owner unsuccessfully argued that the easement could only be used if the City’s improvements directly benefited the property owner. The Court held that a taking does not occur when the government uses its own previously created easement without exceeding the easement’s scope. The easement existed when the property owner purchased the property. Because the City utilized a valid easement, the Court did not analyze the issue regarding the calculation of just compensation. Reversed in part, vacated in part, and remanded. (Joseph P. Schrage, Associate in the Las Vegas office of McDonald Carano Wilson).

Einhorn v. BAC Home Loans Servicing, 128 Nev. Adv. Op. 61 (December 6, 2012)

Before Justices Gibbons, Pickering, and Hardesty. Opinion by Justice Pickering.
This appeal arises from Nevada’s residential Foreclosure Mediation Program (FMP), which is designed to give homeowners a meaningful opportunity to negotiate with their mortgagees to avoid foreclosure. Under NRS 107.086, if a homeowner elects FMP mediation, a non-judicial foreclosure cannot proceed without a certificate that mediation has been concluded. The Appellant homeowner’s mediation did not result in a loan modification, and an FMP certificate was issued, allowing foreclosure to go forward. Appellant filed a petition for judicial review in district court, seeking sanctions against Respondent for failing to meet its burden of producing key documents at mediation. The district court rejected the petition, finding that the loan servicer demonstrated a lack of bad faith. The mediator’s statement had reported a gap in the assignments of the original promissory note as well as a lost note certification, which were seemingly at odds with Respondent’s trustee’s certified claim to possess the original note. The district court found no irregularity in the certified document production. On appeal, the Supreme Court rejected this factual finding, declining to defer to the district court because there was no substantial evidence supporting it. However, the Court noted that the missing assignment had in fact been located by Appellant’s attorney and produced both at the mediation and in the district court action. Appellant, citing NRS 107.086 (which places an affirmative burden on the trust deed beneficiary to produce such documentation), argued that Respondent was not entitled to fill in its gap with a document that Appellant had produced. The Court disagreed and held that the purpose of the statute is not to burden mortgagees, but rather to ensure that the mortgagee actually owns the note and is the party with the authority to negotiate or foreclose. In this case, because the missing assignment was present at the mediation and sufficiently authenticated, the Court found that the purpose of the statute had been fulfilled and that Appellant had not been prejudiced, and concluded that the district court did not err in denying sanctions and allowing the FMP certificate to issue. Affirmed. (Mark Dunagan, Associate in the Reno office of McDonald Carano Wilson.)

In re Fontainebleau Las Vegas Holdings, 128 Nev. Adv. Op. 53 (Oct. 25, 2012)

Before the Court en banc (Justice Pickering recused). Opinion by Chief Justice Cherry.
In this action, the Court answered two of three questions certified by the United States Bankruptcy Court for the Southern District of Florida related to equitable subrogation and prospective contractual subrogation against mechanic’s lien claimants. The Court first determined that equitable subrogation does not apply against mechanic’s lien claimants because NRS 108.225 conclusively provides that mechanic’s liens will attain priority over any lien, mortgage, or encumbrance that attaches after commencement of construction. The Court determined that this conclusion comports with the Nevada Legislature’s express intent to provide a payment scheme for those who provide work and improvements to land. The Court next determined that mechanic’s lien claimants cannot execute prospective subordination agreements. To reach this answer, the Court examined NRS 108.2453 and NRS 108.2457 and determined that these relevant statutory provisions are ambiguous. Accordingly, the Court looked to legislative history and determined that the Nevada Legislature intended to prevent prospective lien waivers. However, the Court further held that neither NRS 108.2453 nor NRS 108.2457 prohibit non-prospective waivers whereby a mechanic’s lien claimant waives the right to priority after that right arises. The remaining question concerned an issue of fact that the Court refused to consider because the pending Florida case is in the early stages of discovery. (Seth T. Floyd, Associate in the Las Vegas office of McDonald Carano Wilson.)

Edelstein v. Bank of New York Mellon, 128 Nev. Adv. Op. 48 (Sept. 27, 2012)

Before the Court En Banc. Opinion by Justice Hardesty.
In this appeal, the Court addressed the ability of a bank to foreclose when Mortgage Electronic Registration System (MERS) is the named beneficiary of a deed of trust. MERS is an electronic registration system that enables banks to repeatedly sell interests in loans secured by deeds of trust without the necessity of recording multiple transfers. Edelstein, a residential homeowner, challenged the Bank’s ability to foreclose on his property, arguing that by making MERS the beneficiary of the deed of trust and the Bank the beneficiary of the promissory note, the deed of trust and note had been irreparably split. The Court first recognized that to obtain a non-judicial foreclosure in Nevada, a party must be the beneficiary of a deed of trust and the holder of the note. The Court next addressed whether a note and deed of trust could be split and whether, if split, they could be unified to allow foreclosure. The Court adopted the approach from the Third Restatement of Property, under which a note and deed of trust are presumed to be transferred together unless the parties expressly state otherwise. Thus, the note and deed of trust could be split (and were in this case) and could be unified after being split by returning both to the same entity. In this case, the Bank had an assignment of the deed of trust from MERS and had the note, which had been endorsed blankly, rendering it negotiable by the bearer; therefore, the Bank had authority to foreclose. Affirmed. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson LLP).

Gold Ridge Partners v. Sierra Pac. Power, 128 Nev. Adv. Op. 47 (Sept. 27, 2012)

Before the Court En Banc (Justice Pickering recused). Opinion by Justice Parraguirre. Concurrence by Justice Gibbons, joined by Justice Cherry.
In this published order denying a motion for remand, the Court considered whether a public agency may abandon an eminent domain action, pursuant to its statutory authority, after having paid just compensation and after entry of a final order of condemnation, but before the issues pending on appeal are resolved. The Court reviewed NRS 37.180(1) to determine the circumstances under which a plaintiff may abandon a condemnation. Based on the plain language of the statute, the Court concluded that a plaintiff may abandon the condemnation proceeding so long as no more than thirty days had passed since entry of final judgment, which occurs after an appeal in a condemnation action. Thus, even if the plaintiff takes title to the property and pays the amount of the judgment for just compensation, the plaintiff may abandon the condemnation proceeding while other related issues, such as property valuation, are pending on appeal. Concluding that the plaintiff was entitled to abandon the condemnation proceeding, the Court considered whether a district court had jurisdiction to dismiss the action upon the plaintiff’s filing of a notice of abandonment and motion to vacate the judgment (which is treated as a motion to dismiss under NRS 37.180). The Court acknowledged that a notice of appeal generally divests the district court of jurisdiction for non-collateral matters; however, the Court noted that the language contained in NRS 37.180 provides that abandonment of a condemnation proceeding may occur “at any time” between the filing of the complaint and thirty days after entry of a final judgment. The statute also requires the district court to dismiss the proceeding upon the motion of any party after a notice of abandonment is filed. Accordingly, the Court concluded that the district court retains limited jurisdiction during the pendency of an appeal to consider a motion to dismiss/motion to vacate judgment filed pursuant to a plaintiff’s notice of abandonment in a condemnation action. As such, the Court denied the motion for remand as moot. Concurring in the order denying the motion to remand, Justices Gibbons and Cherry emphasized the facts that indicated the plaintiff may be equitably stopped from abandoning the proceedings under these circumstances. Motion denied as moot. (Amanda M. Perach, Associate in the Las Vegas office of McDonald Carano Wilson).

Rolf Jensen & Associates, Inc. v. Mandalay Corporation et al., 128 Nev. Adv. Op. 42 (August 9, 2012)

Before the Court en banc (Justice Pickering recused). Opinion by Justice Saitta.
Rolf Jensen & Associates, Inc. (“Rolf Jensen”) was hired by Mandalay Corporation (“Mandalay”) to provide consulting services for the construction of an expansion to the casino in compliance with the Americans with Disabilities Act of 1990 (“ADA”). The construction contract called for Rolf Jensen to indemnify Mandalay for damages arising from any act, omission, or willful misconduct by Rolf Jensen in its performance of its obligations. The Department of Justice found post-construction handicap accessibility violations at the casino. Mandalay agreed to retrofit at an estimated cost of $20 million and sued Rolf Jensen for indemnification, breach of contract, breach of express warranty, and negligent misrepresentation. Rolf Jensen argued that claims were preempted by the ADA. Under the ADA, regardless of the intent of an owner of a place of public accommodation, when the facility is not built to be readily accessible to disabled individuals, the owner is liable for the unlawful discrimination. The ADA contains no provisions permitting indemnification or allocation of liability, except in the context of a landlord-tenant relationship. The Court concluded that allowing the indemnification claim would weaken owners’ incentive to prevent violations of the ADA and would conflict with the ADA’s purpose. Owners could use construction contracts to shield themselves from the ADA and ignore their nondelegable ADA responsibilities. The Court further stated that an owner such as Mandalay, a highly sophisticated entity, is in the best position to prevent violations of the ADA. Therefore, the Court ruled that Mandalay’s indemnification claims were preempted by the ADA. However, the Court further ruled that Mandalay’s claims for breach of contract, breach of express warranty, and negligent misrepresentation were also preempted because the damages Mandalay sought only recovery of the retrofitting costs under those claims. The Court ruled that these were simply restated claims for indemnification. Petition granted; district court directed to enter summary judgment in favor of Rolf Jensen. Affirmed in part and reversed in part. (Joseph P. Schrage, Associate in the Las Vegas office of McDonald Carano Wilson LLP).

Washoe County v. Otto, 128 Nev. Adv. Op. 40 (Aug. 9, 2012)

Before the Court en banc (Justice Pickering recused). Opinion by Justice Hardesty.
In this appeal, another case in the continuing saga of challenges to property taxes in Incline Village, the Court held that a party must strictly comply with the Nevada Administrative Procedure Act naming requirement found at NRS 233B.130(2)(a), as a prerequisite to invoke the district court’s jurisdiction. When a petitioner fails to name in its petition each party of record to the underlying administrative proceedings, the petition is jurisdictionally defective and must be dismissed. Further, if the petitioner fails to invoke the district court’s jurisdiction by naming the proper parties within the statutory time limit, the petition may not subsequently be amended to cure the jurisdictional defect. Affirmed. (Brent Keele, Associate in the Reno office of McDonald Carano Wilson LLP).

Bonnell v. Lawrence, 128 Nev. Adv. Op. 37, 282 P.3d 712 (Aug. 9, 2012)

Before Justices Cherry, Pickering, and Hardesty. Opinion by Justice Pickering.
In this appeal, the Court addressed the standard required for a party who brings an independent action for relief of judgment under NRCP 60(b). NRCP 60(b) permits relief from judgment by either motion or an independent action. While motions for relief from judgment are governed by specific time deadlines, the reference to an independent action is made only in a savings clause in NRCP 60(b), which states that the rule does not preclude courts from entertaining an independent action to relieve a party from judgment. Since the strict timelines of NRCP 60(b) do not apply to independent actions, the Court explained, such an action should be available only to prevent a “grave miscarriage of justice.” The Court held that in this case, Bonnell’s allegations of inadequate notice regarding summary judgment did not constitute the “grave miscarriage of justice” required to sustain an independent action under NRCP 60(b). Moreover, the Court noted that Respondents’ counsel’s actions did not excuse Bonnell’s failure to bring a motion for relief under NRCP 60(b) within the Rule’s 6-month period. Failing to find anything in the record of either suit that would suggest the threat of a “grave miscarriage of justice,” the Supreme Court affirmed the district court’s dismissal of the independent action. Affirmed. (Jeff S. Riesenmy, Associate in the Las Vegas office of McDonald Carano Wilson.)