Newmar Corp. v. McCrary, 129 Nev. Adv. Op. 67 (Oct. 3, 2013)

Before the Court en banc (Chief Justice Pickering recused). Opinion by Justice Cherry.
In this appeal, the Nevada Supreme Court considered issues arising from a buyer’s revocation of a purchase of a motor home. The Court addressed three issues on appeal: (1) whether the Uniform Commercial Code (UCC) and NRS 104.2608 permit the buyer to revoke acceptance and recover the purchase price from the motor home’s manufacturer; (2) whether the district court properly awarded incidental and consequential damages; and (3) whether the district court abused its discretion in awarding attorney fees. As to the first issue, the Court recognized a split of authorities as to whether privity is required between the purchaser and manufacturer before revocation is available against the manufacturer and expressed concerns with both positions. Ultimately, the Court held that it did not have to select a preferred approach because, here, the manufacturer made direct representations to the buyer, creating privity. Accordingly, the buyer could seek to revoke acceptance as to the manufacturer. The Court further held that incidental and consequential damages were available to the buyer under NRS 104.2719 because the manufacturer’s failed attempts to repair the motor home deprived the buyer of the benefit of the bargain such that no other remedy was available to her. Finally, the Court held that the district court abused its discretion in awarding attorney fees because such fees were not authorized under NRCP 68(f) and NRS 17.115(4). Affirmed in part. (Seth T. Floyd, Associate in the Las Vegas office of McDonald Carano Wilson.)

Khan v. Bakhsh, 129 Nev. Adv. Op. 57 (Aug. 1, 2013)

Before Justices Hardesty, Parraguirre, and Cherry. Opinion by Justice Cherry.
In this appeal from judgment after a bench trial, the Court considered several evidentiary issues dealing with contracts for the sale of real property. First, the Court addressed whether evidence of the terms of an agreement for the sale of property that was written but had been lost or destroyed could be considered without violating the statute of frauds. The Court held that evidence of the existence and terms of the agreement should have been admitted because the statute of frauds was satisfied by the original writing even if that writing was lost or destroyed before trial. Second, the Court addressed the argument that the parol evidence rule barred testimony regarding the fraud used to induce an agreement and testimony regarding the existence of the lost or destroyed agreement. The Court determined that the parol evidence rule does not bar consideration of evidence regarding fraud in the inducement of a contract, to establish subsequent alteration of a contract, or to prove the existence or terms of a written but lost or destroyed agreement. Finally, the Court determined that a liquidated damages provision requiring payment of “150% of actual damages” was an unenforceable penalty. Reversed and remanded. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Leventhal v. Black & LoBello, 129 Nev. Adv. Op. 50 (July 11, 2013)

Before Chief Justice Pickering, and Justices Hardesty and Saitta. Opinion by Chief Justice Pickering.
In this appeal from a district court order adjudicating a law firm’s charging lien for attorneys’ fees against its former client under pre-2013 NRS 18.015, the Court considered whether the lien should have been adjudicated when the law firm did not serve the statutory notices required to perfect its lien until eight months after the case was over and property distributed. The Court held that to assert a charging lien against the client’s claim or recovery under NRS 18.015, four requirements must be met. First, the attorney must have presented a claim for affirmative relief, generally recovery of money or property, on behalf of the client. Second, the attorney must perfect the lien by serving a notice in writing by certified mail, return receipt requested, to the client and upon the opposing party whom the client has a cause of action and stating the attorney’s interest in the cause of action. Third, the statute sets a timing requirement that once perfected the lien attaches to a verdict, judgment or decree entered and to any money or property which is recovered on account of the suit or other action, from the time of service of the notices required by this section. Fourth, the attorney must timely file and properly serve a motion to adjudicate the lien. Here, because LoBello failed to perfect its lien until eight months after a stipulated divorce decree was entered and the property was distributed – well after the time a lien could have attached to any of the property governed by that settlement – and because the settlement of a later custody dispute did not modify the property distribution in the divorce decree or otherwise bring that property back into dispute, there was no property to which LoBello’ s lien could attach. Since there were no “tangible fruits” upon which the lien could attach at the time the lien was served, the district court should not have adjudicated the lien under NRS 18.015(4). Reversed. (Lisa M. Wiltshire Alstead, Associate in the Reno office of McDonald Carano Wilson).

In re Fox, 129 Nev. Adv. Op. 39 (May 30, 2013)

Before the Court en banc. Opinion by Justice Cherry.
In this opinion, the Court answered the following certified question from the United States Bankruptcy Appellate Panel of the Ninth Circuit: “[i]n Nevada may a judgment debtor claim exemptions under NRS 21.090 belonging not only to herself, but also to her non-debtor spouse?” The Court noted that, under NRS 21.090 (f) and (z), an individual can exempt one vehicle up to $15,000 in value and up to $1,000 in otherwise non-exempt personal property (the wildcard exemption). However, when a married couple files a joint bankruptcy petition, they may collectively exempt two vehicles and up to $2,000 in otherwise non-exempt personal property. In addressing this question, the Court recognized that whenever a married individual files for bankruptcy and his/her spouse does not join the petition, the bankruptcy estate includes all of the marital community property. Given the inclusion of all marital property in an individual debtor’s bankruptcy estate, the question before the Court was whether the debtor spouse is entitled to utilize the non-debtor spouse’s exemptions set forth in NRS 21.090(f) and (z) to allow for a total exemption of two vehicles and up to $2,000 in otherwise non-exempt personal property. In reviewing an Idaho bankruptcy court decision concerning the same issue and the plain language of the statute which refers only to the “judgment debtor’s equity” in such property, the Court concluded that a debtor in bankruptcy may not utilize his/her non-debtor spouse’s exemptions to exempt additional marital property from the estate. Thus, a married debtor whose spouse does not join in the bankruptcy petition may only exempt one vehicle and up to $1,000 in personal property not otherwise exempt. Based on the foregoing, the Court determined that a debtor is limited to one set of exemptions, as set forth in NRS 21.090, and she may not claim the exemptions belonging to her non-debtor spouse notwithstanding the fact that all marital community property is considered property of the estate. Certified question answered in the negative. (Amanda M. Perach, Associate in the Las Vegas office of McDonald Carano Wilson LLP.)

Rock Bay, LLC v. Dist. Ct., 129 Nev. Adv. Op. 21 (April 4, 2013)

Before Chief Justice Pickering and Justices Hardesty and Siatta. Opinion by Justice Hardesty In this petition for a writ of prohibition, the Court considered when discovery of a nonparty’s assets is permissible under NRCP 69(a), which allows for post-judgment discovery in aid of execution of a judgment. The creditors had obtained a judgment in Florida against a group of debtors. During the course of the Florida litigation, there was a series of transfers between the debtors and Rock Bay. Rock Bay was an entity that was deeply intertwined with the judgment debtors and the managing member of Rock Bay was Maybourne, Inc., an entity having the same address as the judgment debtors. The judgment creditors domesticated the Florida judgment in Nevada. Shortly thereafter, Rock Bay was dissolved. The judgment creditors subpoenaed Rock Bay’s and Maybourne’s accounting records and Rock Bay’s financial records. Petitioners, Rock Bay and Maybourne moved to quash, which the district court denied. The Court concluded that discovery of a nonparty’s assets under NRCP 69(a) is not permissible absent special circumstances such as situations in which the judgment debtor and the nonparty have a relationship which raises a reasonable suspicion as to the good faith of asset transfers between the two parties or when the nonparty is the alter ego of the judgment debtor. Thus, the Court determined that the subpoenas issued against Rock Bay were permissible even when considering Rock Bay’s privacy interests in financial records because there was a relationship between the judgment debtors and Rock Bay which raised a reasonable suspicion as to the good faith of the transfers between the parties. However, the Court concluded that the district court improperly declined to quash the subpoena issued against Maybourne as there was no evidence that Maybourne ever held or transferred assets with the judgment debtors nor did the judgment creditors ever assert that Maybourne was an alter ego. Petition denied in part and granted in part. (Amanda M. Perach, Associate in the Las Vegas office of McDonald Carano Wilson).

Butwinick v. Hepner, 128 Nev. Adv. Op. 65 (Dec. 27, 2012)

Before the Court en banc. Per curiam opinion.
This opinion arises from respondents’ motion to substitute themselves for appellants, as their successors in interest, and to dismiss the appeal. The underlying action involved claims filed by the respondents (plaintiffs in the underlying action) and counterclaims filed by the appellants (defendants in the underlying action). After trial, the district court entered judgment for the respondents and denied any relief to appellants on their counterclaims. The appellants filed an appeal, but lacked sufficient resources to post a supersedeas bond or obtain a stay. Following trial, the respondents executed on the judgment and ostensibly acquired the appellants’ claims and defenses in the underlying action at a judgment execution sale. Thereafter, the respondents filed a motion seeking to substitute themselves as the successors in interest to appellants along with a motion to dismiss the appeal. In denying the motion to substitute and dismiss in its entirety, the Court clarified that although the “claims” held by appellants could be viewed as “personal property” pursuant to NRS 10.045 and therefore executed upon by the respondents in enforcement of the judgment pursuant to NRS 21.010 and Gallegos v. Malco Enterprises of NV, 127 Nev. ___, ____, 255 P.3d 1287, 1289 (2011); however, the “defenses” held by appellants were not similarly assignable. Because appellants had waived any “claims” by failing to raise those arguments on appeal, the only issues remaining on appeal were “defenses”, which respondents could not acquire and could not dismiss. Motion denied. (David Stoft, Associate in the Las Vegas office of McDonald Carano Wilson.)

Casey v. Wells Fargo Bank, N.A., 128 Nev. Adv. Op. 64 (Dec. 13, 2012)

Before Justices Saitta, Pickering, and Hardesty. Opinion by Justice Pickering.
In this appeal, the Court considered a judgment summarily affirming a motion to confirm an arbitration award under the Uniform Arbitration Act. After receiving an arbitration award, Wells Fargo immediately filed a motion to confirm the arbitration award. Although the 90-day statutory period to challenge the award had not expired, the district court summarily granted the motion to confirm without allowing time to oppose it. The Court determined that this was error, holding that a district court may not confirm an arbitration award while there is still time within the 90-day period to challenge the arbitration award without allowing an opposition to the motion to confirm. There have been very few published cases interpreting the Uniform Arbitration Act and this opinion establishes the answers to some questions in addition to its primary holding. Specifically, the Court made clear that an action to confirm an arbitration award may be initiated by filing a motion to confirm the award and that a party has only ten days to oppose such a motion, despite the fact that it is an initial pleading. The Court left open the other important question of whether non-statutory bases for objecting to an arbitration award may be raised outside of the 90-day period to challenge the award. Reversed and remanded. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Grisham v. Grisham, 128 Nev. Adv. Op. 60 (Dec. 6, 2012)

Before Justices Saitta, Pickering, and Hardesty. Opinion by Justice Pickering.
In this appeal, the Court upheld a final divorce decree based upon a written but unsigned property settlement agreement. Respondent and appellant reached a divorce settlement but the final draft contained interlineated handwritten changes and the parties failed to execute a clean copy prior to the prove-up hearing. At the hearing the draft was admitted as an exhibit, the handwritten changes were read into the record, the parties stipulated that the agreement would be binding, and the court approved the stipulation by minute order. Subsequently, appellant refused to sign the final draft of the agreement and challenged the decree approving the agreement. The Court confronted the interesting question of whether in-court proceedings could create an enforceable agreement. The Court held that District Court Rule 16 permits the enforcement of an agreement if it is entered in the court minutes following a stipulation. Applying general principles of contract law, the Court found that appellant had manifested consent to the agreement by his acknowledgement under oath that he had reviewed and agreed to it. The agreement was not invalidated by the district court’s failure to read the entire agreement out loud into the record. Although the Court noted that there may be a case where an in-court proceeding is so truncated by reliance on exhibits that an intent to be bound is absent, the facts before the Court reflected an implied consent that the agreement be entered in the minutes. Finally, the Court noted that a stipulated judgment made in open court satisfies the statute of frauds. Affirmed. (Adam Hosmer-Henner, Associate in the Reno office of McDonald Carano Wilson.)

United Rentals Hwy. Techs. v. Wells Cargo, 128 Nev. Adv. Op. 59 (Dec. 6, 2012)

Before Justices Saitta, Pickering, and Hardesty. Opinion by Justice Hardesty.
In this appeal, the Court considered two issues regarding contractual indemnity clauses: (1) whether the district court erred in finding that a contractual indemnity clause limiting the indemnitor’s duty to defend “to the extent caused in whole or in part by the negligent acts or omissions or other fault of [the indemnitor]” did not require a determination that the indemnitor cause an injury before triggering the duty to indemnify and (2) whether the district court erred in finding that the indemnitor had a duty to defend regardless of the ultimate determination of cause and was entitled to attorney fees in the amount of the defense. As to the first issue, the Court concluded that contractual indemnity clauses containing “to the extent caused” language “must be strictly construed as limiting an indemnitee’s losses only to the extent the injuries were caused by the indemnitor.” Here, because the jury found that the indemnitor was not at fault for the underlying injury at issue in the case, the indemnitor had no duty to indemnify. The Court further held that, for the same reason, the indemnitor was not required to defend the indemnitee for its own negligence where the indemnitor was not found to have caused the injury. Accordingly, the award of attorney fees for defending the underlying action was improper. Reversed. (Seth T. Floyd, Associate in the Las Vegas office of McDonald Carano Wilson.)

Certified Fire Prot. v. Precision Constr., 128 Nev. Adv. Op. 35 (Aug. 9, 2012)

Before Justices Cherry, Gibbons and Pickering. Opinion by Justice Pickering.
In this appeal, the Court clarified the doctrine of quantum meruit, ultimately affirming a district court judgment concluding that there was no express or implied contract and that there had been no benefit conferred on the defendant. The Court explained that quantum meruit “is a cause of action in two fields: restitution and contract.” Essentially, it is a measure of damages that can be used to determine the amount of restitution under the equitable theory of unjust enrichment or an award of damages under the legal theory of implied contract. Relative to an “implied-in-fact” contract, “a party may invoke quantum meruit as a gap-filler to supply the absent term” of the price to be paid for the good or service after it is determined that “the parties intended to contract and promises were exchanged, the general obligations for which must be sufficiently clear.” In affirming the lower court, the Court determined as to appellant “there there was no contract, express or implied, for the design related work standing alone” and “too many gaps to fill in the asserted contract for quantum meruit to take hold.” Moving to the claim as based on “restitution” the Court explained that a litigant “must establish each element of unjust enrichment.” In that regard, the Court required a showing that the respondent received a benefit from the services provided by the appellant, but clarified that a “benefit” is “not confined to the retention of money or property,” it can include “services beneficial to or at the request of the other” and “denotes any form of advantage.” (internal quotations omitted). Because the appellant had not conveyed a benefit to the respondent, the Court affirmed the district court’s conclusion that there had been no unjust enrichment. Finally, the Court addressed respondent’s claim for attorneys’ fees under NRCP 68 and NRS 17.115 or NRS 108.237, the Court determined that it is not necessary for the district court to make express findings as to each of the Beatty factors in using its discretion to award or deny attorneys fees under NRCP 68 and/or NRS 17.115. As to respondent’s request for fees under NRS 108.237, the court affirmed the district court’s denial of those fees despite there being no explicit finding as to the request for fees under NRS 108.237, finding that the record supported a finding that appellant had “a reasonable basis” for its claims. Affirmed. (David J. Stoft, Associate in the Las Vegas office of McDonald Carano Wilson LLP).

Road & Highway Builders v. N. Nev. Rebar, 128 Nev. Adv. Op. 36 (Aug. 9, 2012)

Before Justices Cherry, Gibbons, and Pickering. Opinion by Justice Cherry.
In this appeal, the Court held that a claim for fraudulent inducement is barred as a matter of law if the claim directly contradicts the terms of the written contract. The Court based its conclusion on principles underlying the parol evidence rule and broadly suggested that any claim that is contrary to the written terms of a complete contract would be barred as a matter of law. In addressing compensatory damages for the claims of breach of contract and breach of the covenant of good faith and fair dealing, the Court reiterated that damages for breach of contract should include lost profit or expectancy damages. The Court allowed the award of lost profits for work that had been performed despite the fact that the contract was terminable at will, distinguishing a case that prevented the recovery of lost future profits when a contract is terminable at will. Affirmed in part and reversed in part. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson LLP).

State, Bus. & Indus. v. Nev. Ass’n Servs., 128 Nev. Adv. Op. 34 (Aug. 2, 2012)

Before Justices Douglas, Gibbons, and Parraguirre. Opinion by Justice Gibbons.
This action arose out of a dispute between the State of Nevada Department of Business and Industry, the Financial Institutions Division and its Commissioner (Department) and Nevada Association Services (NAS). In November 2010, the Department issued an advisory opinion in which it interpreted certain statues within NRS 116, in particular NRS 116.3116, and their importance in the Department’s regulation of collection agencies. NAS filed its complaint and motion for preliminary injunction in district court, arguing that the Department lacked jurisdiction to issue advisory opinions interpreting provisions of NRS Chapter 116. The district court granted NAS’s request for a preliminary injunction. The Court affirmed the district court’s order. In reaching this conclusion, the Court reviewed several sections of NRS 116. Under NRS 116.615, the Court found the language to be clear that the Commission for Common Interest Communities and Condominium Hotels and the Real Estate Division are responsible for regulating and administering the chapter and there is no provision granting any other commission or department the authority to regulate or interpret the language of the chapter. Consequently, the Court found the Department lacked jurisdiction to issue an advisory opinion interpreting NRS Chapter 116 and thus the district court did not abuse its discretion in determining that NAS had a likelihood of success on the merits. Furthermore, the Court held the district court properly determined that the mere act of filing a disciplinary action against NAS would cause irreparable harm. In its findings, the Court explained that it was possible for the Department to revoke NAS’s license without a hearing under its powers , thus if such an instance occurred, NAS would be unable to conduct business during that time which could lead to irreparable harm. Affirmed. (Anthony Carano, Associate in the Reno office of McDonald Carano Wilson LLP).

Tri-County Equipment & Leasing v. Klinke, 128 Nev. Adv. Op. 33 (June 28, 2012)

Before the Court En Banc. Opinion by Justice Hardesty.
In this appeal, the Court considered whether the collateral source rule operated to exclude evidence of California workers' compensation payments received by a California employee involved in an accident in Nevada. Reversing and remanding, the Court determined that evidence of the actual amount of workers' compensation benefits paid should have been admitted to the jury pursuant to NRS 616C.215, which permits the admission of such evidence in limited circumstances. Although NRS 616C.215 permits the admission of evidence regarding workers' compensation payments to a jury in certain circumstances provided that a clarifying jury instruction is given, the district court granted a motion in limine finding that the statute did not apply because the respondent received her worker's compensation pursuant to California's workers' compensation scheme and not Nevada's workers’ compensation scheme. Reversing, the Court held that the district court's narrow reading of NRS 616C.215 as applying to only Nevada workers' compensation benefits would defeat the statute's purpose of avoiding confusion to the jury about the payment and nature of workers' compensation benefits in cases in which those benefits have been paid under another state's laws. The Court found no logical reason to treat benefits received pursuant to another state's workers' compensation scheme any differently than benefits received from a Nevada employer. Therefore, in a trial governed by Nevada law, the workers' compensation payments made to an injured employee must be admitted as evidence and the proper instruction regarding the jury's consideration of those payments must be given. Additionally, although the Court specifically ordered briefing to determine whether a reduction in the cost of medical services based on a relationship with an insurance company, a medical “write-down”, was a benefit for which evidence would be barred by the collateral source rule, the majority held that because NRS 616C.215 specifically allows evidence of the benefits actually paid they did not need to address the issue of medical write-downs generally. Justice Gibbons, in a concurring opinion with which Justice Cherry joined, would reach the issue and hold that the collateral source rule bars evidence of medical write-downs. Reversed and Remanded. (Amanda C. Yen, Associate in the Las Vegas 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.)

Webb v. Shull, 128 Nev. Adv. Op. 8 (March 1, 2012)

Before Justices Douglas, Hardesty, and Parraguirre. Opinion by Justice Hardesty.
In this appeal and cross-appeal, the Court addressed whether proof of a mental state was necessary for an award of treble damages under NRS 113.150, which requires sellers of property to disclose known defects. Based on the plain language of NRS 113.150, the Court held that an award of treble damages under that statute was remedial, not punitive, and did not require any evidence of intent or other heightened mental state. The Court also considered a challenge to the district court’s determination regarding alter ego liability of one of the respondent; however, stating that the district court’s record was unclear and the district court made factual findings at odds with its denial of liability, the Court reversed and remanded for the district court to make factual findings and conclusions of law regarding alter ego liability. Affirmed in part, vacated in part, and remanded. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)

Café Moda v. Palma, 128 Nev. Adv. Op. 7 (March 1, 2012)

Before Justices Douglas, Hardesty, and Parraguirre. Opinion by Justice Parraguirre.
In this appeal, the Court addressed NRS 41.141, Nevada’s comparative negligence statute, and whether it allowed for the apportionment of a damages award between negligent and intentional tortfeasors. Concluding that NRS 41.141 is ambiguous and turning to the legislative history and intent, the Court determined that “negligence” in the statute meant “fault”. As such, liability could be apportioned between negligent and intentional tortfeasors. The negligent tortfeasor was severally liable up to the level of fault found by the jury; the intentional tortfeasor was jointly and severally liable for the entire amount of damage. Reversed and remanded for the district court to enter a modified judgment. (Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson.)