Year: 2015

Can a recorded tax lien be recognized as a mortgage lien?

Posted on by Jeff Jaeger

State, Dep’t of Taxation v. Kawahara (Nev. Supreme Ct. – June 25, 2015)

The United States Bankruptcy Court for the District of Nevada certified two questions to the Nevada Supreme Court concerning the priority of two competing liens on the proceeds of a property sale. The first question asked whether a Certificates of Tax Lien has the effect and priority of a nonconsensual judgment lien or the effect and priority of a consensual mortgage lien. The second asked which lien has priority over the proceeds of a 2012 property sale: a 2009 deed of trust, first recorded in 2011, or a tax lien, created and recorded in 2010.

The Kawaharas loaned the Allisons $400,000. The Allisons executed a note to the Kawaharas in that amount secured by a deed of trust on a Reno property. In July 2009, the note was delivered to the Kawaharas. Although all parties believed the deed of trust had been recorded at that time, it was not recorded until February 2011.

The Allisons owned Allison Automotive Group, Inc., a car dealership in Reno. The dealership became delinquent in taxes owed to the Nevada Department of Taxation (Department). It submitted a signed payment agreement to the Department, which obligated the dealership to pay $438,044.68 pursuant to a payment schedule. In connection with that submission, the Allisons personally guaranteed payment to the Department. In December 2010, the Department recorded certificates of tax lien against the Allisons.

The Allisons filed for bankruptcy in November 2011. As part of the administration of the bankruptcy estate, the bankruptcy court approved the sale of the Reno property with liens attaching to the sale proceeds in the order of their priority. The bankruptcy court’s certified questions concerned the dispute between the Kawaharas and the Department over the priority of their respective liens on the Reno property and, more directly, which party was entitled to be repaid first from the $482,000 in remaining proceeds from the property’s sale.

To record a mortgage or real property lien in Nevada, NRS 111.312(1) requires that the filed document contain certain formalities, including the grantee’s address and the conveyed parcel’s county-assigned number. In contrast, to record a tax lien, NRS 360.473(1) provides that the Department may simply file a certificate of delinquency setting forth (1) the amount due, (2) the name and address of the debtor, and (3) the Department’s statement that it has complied with all procedures required by law.

The Nevada Supreme Court explained that in this case, the Department filed a tax lien, not a mortgage. The bankruptcy court stated that the Department filed a tax lien certificate. The bankruptcy court’s finding was supported by the record, which showed that the Department’s filings refer to tax statutes and did not include parcel numbers.

The Department requested that the Court give the certificates of tax lien the effect and priority of a mortgage. But, the Court reasoned that it would defeat the purpose of a centralized recording system if the law protected people who filed the wrong liens. Here, the Department filed certificates of tax lien, not a mortgage or any instrument that fulfilled the formalities of a mortgage lien. Third parties reviewing the public records would not see a mortgage on the property, but only a tax lien with the Allisons’ address. The Department further argued that their interest arose from a guarantee, not by operation of law, and therefore could not legally be a tax lien. The Court explained that may be true, but then the Department should not have recorded tax lien certificates. Thus, the Court concluded the Department’s filings have the effect and priority of exactly what they recorded: tax liens. Because the Department’s tax lien was given the effect of a judgment lien, the Court determined the Department was not protected by Nevada’s recording statutes.

Because Nevada’s recording statutes did not protect the Department against unrecorded conveyances, the rule applicable to this case was the common law rule of “first in time, first in right.” The Kawaharas’ deed of trust was valid and attached in 2009, when their interest was created. The Department’s tax lien certificates were filed, and thereby attached, in 2010. Therefore, the Court concluded the Kawaharas’ deed of trust had priority over the Department’s tax lien.

Did the government’s disclosure of its plan to acquire property in 2028 constitute a taking?

Posted on by Jeff Jaeger

NDOT v. Eighth Jud. Dist. Ct. (Nev. Supreme Ct. – June 25, 2015)

The issues is whether the district court erred by determining that Nevada’s Department of Transportation (NDOT) owed just compensation for taking Ad America’s property in conjunction with Project Neon, a freeway improvement plan, based on NDOT’s and the City of Las Vegas’ precondemnation activities. Specifically, did a taking occur under either the United States or Nevada Constitutions because NDOT publicly disclosed its plan to acquire Ad America’s property to comply with federal law, the City independently acquired property that was previously a part of Project Neon, and the City rendered land-use application decisions conditioned on coordination with NDOT for purposes of Project Neon.

Project Neon

NDOT is the lead agency for Project Neon, a six-phase, 20- to 25-year freeway improvement project for the Interstate Highway 15 (I-15) corridor between Sahara Avenue and the U.S. Route 95/I-15 interchange in Las Vegas. With an estimated cost of between $1.3 and $1.8 billion dollars, the completion of Project Neon depends primarily on funding from the Federal Highway Association (FHWA). To procure this funding, NDOT complied with the National Environmental Policy Act (NEPA) by performing an environmental assessment of Project Neon between 2003 and 2009. NEPA required NDOT to publicly release all reasonable development alternatives it was considering for public comment. Each of these alternatives included the commercial rental property owned by Ad America.

Based on the results of the environmental assessment, NEPA also required NDOT to complete an environmental impact statement (EIS). In 2011, after the approval of the EIS, FHWA allocated $203 million to NDOT for Phase 1 of Project Neon. Notably, at that time, NDOT did not anticipate acquiring Ad America’s property for another 17 years during Phase 5, assuming funding was available.

To reduce the impacts associated with Project Neon, NDOT coordinated efforts with the City of Las Vegas and other agencies. Anticipating the development of an arterial improvement (the MLK Connector) that was no longer a part of Project Neon, the City amended its Master Plan to allow for certain road widening and, on October 24, 2007, purchased a tract of land from a private party. Additionally, the City approved 19 land-use applications for development rights of properties in proximity to Project Neon.

Ad America

Ad America acquired its property between 2004 and 2005, planning to redevelop existing business space into higher-end commercial offices with multilevel parking. To that end, Ad America hired a surveyor and architect, the latter having drafted a preliminary design. Ad America then retained a political consultant to obtain necessary development permits. After speaking with members of the City Planning Department and one City Council member, the consultant opined that there was a de facto moratorium on development in the path of Project Neon. Based on this opinion, Ad America chose not to submit development applications for its property.

In October 2007, Ad America began informing its tenants that its property would be acquired for Project Neon. Although Ad America’s net rental income remained steady from 2007 to 2010, it decreased by approximately 37 percent in 2011. Ad America had not had its property appraised or attempted to sell it. As of August 2012, Ad America could no longer meet its mortgage commitments.

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Does testimony related to how cellphone signals are transmitted constitute expert testimony?

Posted on by Jeff Jaeger

Burnside v. State (Nev. Supreme Ct. – June 25, 2015)

Pursuant to NRS 50.265, a lay witness may testify to opinions or inferences that are rationally based on the perception of the witness; and helpful to a clear understanding of the testimony of the witness or the determination of a fact in issue. NRS 50.275 provides that a qualified expert may testify to matters within their special knowledge, skill, experience, training or education when scientific, technical or other specialized knowledge that will assist the trier of fact to understand the evidence or to determine a fact in issue.

The issue is whether testimony related to cell phone tower transmissions falls within the realm of expert testimony.

The victim in this case, Kenneth Hardwick, was a former professional basketball player who was known to carry quite a bit of cash, wear expensive clothing and jewelry, and carry cigars in a silver traveling humidor. In the early morning of December 5, 2006, Hardwick was at the Foundation Room Lounge at the Mandalay Bay Resort and Casino in Las Vegas. Around 3:30 a.m., Burnside and McKnight entered the Foundation Room Lounge. About 30 minutes later, Hardwick left the Foundation Room Lounge and got in an elevator. McKnight followed Hardwick into the elevator. After exiting the elevator, Hardwick approached the west valet stand to retrieve his car, and McKnight reunited with Burnside in the casino and then walked to the parking garage near the west valet stand. At the valet stand, Hardwick noticed that an acquaintance was involved in a disagreement over a missing valet ticket, and he attempted to negotiate the dispute. Meanwhile, Burnside and McKnight got into a white Mazda, parked in a no parking zone, and watched Hardwick for about an hour. When Hardwick eventually exited the parking structure, Burnside and McKnight followed him.

A short time later, Hardwick pulled up to a Jack-in-the-Box drive-thru window. At the time, Hardwick was speaking on his cell phone with his child’s mother, who heard loud bangs over the phone. A video recording obtained from a surveillance camera showed a man wearing a “puffy” black jacket point a gun and shoot into Hardwick’s car several times. Hardwick approached the drive-thru window, indicating that he had been shot. Hardwick suffered four gunshot wounds to his chest and both arms. While the gunshot wound to his chest caused the most damage to his body, all of the wounds resulted in great blood loss and contributed to his death.

About a week later, the police showed a witness a set of photographs, and she tentatively identified McKnight as the driver of the white car, but was unable to identify the passenger. Subsequently, after reviewing still photographs taken from the surveillance videos obtained from the Mandalay Bay, she was able to identify Burnside and McKnight as the men she saw after the shooting based on their clothing.

Other evidence linked Burnside to Hardwick’s murder. The clothing that Burnside and McKnight were wearing when they were recorded by the Mandalay Bay surveillance cameras matched the clothing worn by the men in the Jack-in-the-Box video surveillance. McKnight’s mother owned a white Mazda, which she had loaned to McKnight. In December 2006, McKnight approached a family friend, Edmonds, and asked Edmonds to store a car in Edmonds’ garage. Edmonds agreed. The following day, McKnight’s mother retrieved the car from Edmonds’ garage. During a search of Edmonds’ home, police found 9mm ammunition in a room in which McKnight had stayed in December 2006. Eight 9mm shell casings had been recovered from the Jack-in-the-Box drive-thru, all fired from a single firearm. During a search of Burnside’s mother’s home, the police recovered a day planner with a handwritten entry dated February 16, 2007, that suggested that Burnside’s photograph had been shown on Crime Stoppers. Additionally, Burnside’s and McKnight’s cell phone records showed that calls made from or received by their cell phones in the hours surrounding the murder were handled by cell phone towers near the Mandalay Bay.

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Can a petitioner present new mitigating evidence to show innocence of the death penalty?

Posted on by Jeff Jaeger

Lisle v. State (Nev. Supreme Ct. – June 25, 2015)

The issue is whether a claim of actual innocence of the death penalty offered as a gateway to reach a procedurally defaulted post conviction relief claim can be based on a showing of new evidence of mitigating circumstances.

On the evening of October 22, 1994, Melcher was driving on a Las Vegas freeway and pulled his van alongside a Mustang driven by Logan. Lisle, the front passenger in Melcher’s van, shot and killed Logan. Evans was in the van’s back seat, and he and Melcher testified against Lisle at trial. The jury found Lisle guilty of first-degree murder with the use of a deadly weapon, found a single aggravating circumstance (the murder was committed by a person who knowingly created a great risk of death to more than one person), found other mitigating circumstances, and concluded that the mitigating circumstances did not outweigh the aggravating circumstance. The jury sentenced Lisle to death. The Nevada Supreme Court affirmed the judgment and sentence.

Lisle then filed a timely post-conviction petition for a writ of habeas corpus, and the district court appointed counsel to supplement and litigate the petition. The district court denied the petition, and the Nevada Supreme Court affirmed the district court’s order. Lisle filed his second post-conviction habeas petition, claiming that he received ineffective assistance of trial, appellate, and post-conviction counsel. The district court dismissed the petition as procedurally barred. Lisle appealed.

Lisle argued, among other issues, that he was actually innocent of the death penalty on two grounds. First, he argued that there was insufficient evidence of the single aggravating circumstance found by the jury. Second, he argued that had the jury been presented with the new evidence of mitigating circumstances that he provided to the post-conviction court, no rational juror would have found him eligible for the death penalty.

The Nevada Supreme Court found that the first ground underlying Lisle’s actual-innocence claim, based on a challenge to the aggravating circumstance, lacked merit. Lisle pointed to no new evidence supporting his claim of actual innocence with respect to the aggravating circumstance. Nor did his arguments present any issue of first impression as to the legal validity of the aggravating circumstance. Accordingly, Lisle had not demonstrated actual innocence based on his challenge to the aggravating circumstance, and the Court concluded that the district court did not err in declining on this basis to reach Lisle’s procedurally barred claims.

The second ground underlying Lisle’s actual-innocence claim presented an issue of first impression for the Court: can a claim of actual innocence of the death penalty offered as a gateway to reach a procedurally defaulted claim be based on a showing of new evidence of mitigating circumstances? Although the Court had not answered that question, the United States Supreme Court addressed it in Sawyer v. Whitley, 505 U.S. 333 (1992), in the context of a successive federal habeas petition challenging a Louisiana death sentence.

The Sawyer court rejected the idea that the actual-innocence exception to procedural default should extend to the existence of new mitigating evidence. The court’s conclusion was based primarily on two observations. First, extending actual innocence to include new mitigating evidence would reduce the exception to little more than what is already required to show ‘prejudice,’ a necessary showing for habeas relief for many constitutional errors, such as ineffective assistance of counsel. The court reasoned that a petitioner should have to show something more than he would have had to show to obtain relief on his first habeas petition to get a court to reach the merits of his claims on a successive habeas petition. Second, the subjective nature and breadth of mitigating circumstances would so broaden the actual innocence inquiry as to make it anything but a narrow exception to the principle of finality. The Court agreed that these observations counsel against opening the actual-innocence gateway to include new mitigating evidence, for otherwise the exception would swallow the procedural defaults adopted by the Legislature.

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Does the sale of an LLC affect a restrictive covenant against its former employee?

Posted on by Jeff Jaeger

Excellence Cmty. Mgmt. v. Gilmore (Nev. Supreme Ct. – June 25, 2015)

The issue is whether the sale of 100 percent of the membership interest in a limited liability company affects the enforcement of an employee’s employment contract containing a restrictive covenant.

Excellence Community Management (ECM) is a Las Vegas based Nevada limited liability company (LLC) that provides condominium and homeowners’ association (HOA) management services. Gilmore was employed by ECM as a community association manager from 2005 to 2012 and was directly responsible for managing multiple associations. In April 2011, Gilmore signed an employment agreement that prohibited her from revealing trade secrets and disclosing ECM’s confidential information for a period of 24 months after termination of her employment. The employment agreement also included an 18-month nonsolicitation clause and an 18-month noncompetition clause, requiring Gilmore to refrain from soliciting persons or entities contractually engaged in business with ECM. The employment agreement did not include an assignment clause.

At the time Gilmore signed the employment agreement, ECM was owned and operated the McCaffertys. In May 2011, 90 percent of the McCaffertys’ membership interest in ECM was purchased by First Service Residential Management Nevada (FSRM). One year later, the McCaffertys sold or relinquished their remaining membership interest in ECM to FSRM. The purchase agreement between the McCaffertys and FSRM specifically stated that the McCaffertys would sell, assign and transfer the purchased interest to FSRM, and FRSM would purchase the purchased interest from the McCaffertys, free and clear of any encumbrance.

In early June 2012, Gilmore submitted her resignation to ECM and informed ECM that, upon final termination of her employment, she would begin working for Mesa Management, LLC. Upon receiving Gilmore’s notification, ECM’s president decided to terminate Gilmore. Approximately three weeks later, ECM sent Gilmore a cease-and- desist letter, which alleged that Gilmore violated her 2011 employment agreement by contacting ECM’s clients to inform them she was no longer employed by ECM and soliciting them to hire Mesa. Notwithstanding ECM’s cease-and-desist letter, Mesa’s owner sent a solicitation letter to numerous HOA boards announcing the start of Gilmore’s employment with Mesa.

ECM filed a complaint seeking damages and injunctive relief against Gilmore and Mesa, and subsequently filed a motion for a preliminary injunction to enforce the employment agreement pending the district court’s resolution of the case. During the preliminary injunction hearing, the district court asked ECM whether, if successful on its case, money damages could be calculated and could make ECM whole. Counsel conceded that money damages would make ECM whole, but also pointed to caselaw from other jurisdictions holding that irreparable harm is presumed where an employee has breached a restrictive covenant.

The district court denied ECM’s motion for preliminary injunction for two reasons. First, the court relied upon Traffic Control Services, Inc. v. United Rentals Northwest, Inc., 120 Nev. 168, 87 P.3d 1054 (2004), to conclude that the agreement was not assignable to FSRM absent a clause permitting the assignment or an agreement with the employee consenting to the assignment. Second, the district court determined that a preliminary injunction was unwarranted because ECM had failed to show irreparable harm for which compensatory damages were not an adequate remedy.

ECM appealed, arguing that the district court erred in relying on Traffic Control in denying ECM’s motion for a preliminary injunction because the LLC membership sale that took place in this case was not an asset sale for which an employee must consent to the assignment of his or her employment agreement to the asset purchaser. Furthermore, ECM contends that the district court abused its discretion in determining that the requirements for a preliminary injunction were not met because there was insufficient evidence of irreparable harm.

The district court relied upon Traffic Control to conclude that the employment agreement was not assignable to FSRM absent a clause permitting the assignment because a new entity was introduced after the sale. ECM argued that HD Supply Facilities Maintenance, Ltd. v. Bymoen, 125 Nev. 200, 210 P.3d 183 (2009), and the case it primarily relied upon, Corporate Express Office Products, Inc. v. Phillips, 847 So. 2d 406 (Fla. 2003), provide that in the type of corporate transaction where 100 percent of the shares of a corporation are sold, the enforceability of any restrictive covenants are unaffected, because under such circumstances, there is no new employer. ECM further argued that the membership interest sale of an LLC, such as was conducted here, is equivalent to a stock sale in a corporation, not an asset sale as was the case in Traffic Control. The Nevada Supreme Court agreed and concluded that the 100-percent membership sale of the LLC that took place in this case was equivalent to the sale of 100 percent of the stock in a corporation. Neither transaction results in a new entity.

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Must inmates exhaust their administrative remedies before filing a state civil rights action?

Posted on by Jeff Jaeger

Berry v. Feil (Nev. Ct. App. – June 11, 2015)

The issue is whether civil rights complaints filed by inmates under 42 U.S.C. § 1983 in Nevada state courts are subject to the exhaustion of administrative remedies requirement imposed by the federal Prison Litigation Reform Act of 1995’s (PLRA) amendment of 42 U.S.C. § 1997e(a).

Berry, an inmate, filed a civil rights complaint against Feil, the Lovelock Correctional Center law library supervisor, and Brown, an inmate library clerk, in the Sixth Judicial District Court pursuant to 42 U.S.C. § 1983. In his complaint, Berry alleged that Feil and Brown failed to mail his confidential legal mail and conspired to hide evidence of this alleged transgression, and that Feil retaliated against Berry for filing a grievance against her by refusing his requests for legal supplies and confiscating his books. Based on these allegations, the complaint asserted violations of Berry’s right to free speech under the First Amendment to the United States Constitution and his rights to due process and unobstructed access to the courts under the Fifth and Fourteenth Amendments.

Feil subsequently moved to dismiss the complaint for failure to exhaust administrative remedies. While Feil acknowledged that Berry filed grievances regarding the incidents alleged in his complaint, she asserted he nonetheless failed to exhaust his administrative remedies because he did not complete all the steps of the grievance process as required by federal law. In response, Berry moved to strike the motion to dismiss. Although he did not file a separate, specifically labeled opposition to the motion to dismiss, his motion to strike included substantive arguments addressing the grounds on which Feil sought to have his complaint dismissed, and thus, despite its title, it effectively operated as both a motion to strike and an opposition to Feil’s motion. The district court subsequently dismissed Berry’s entire complaint without prejudice based on his failure to exhaust his administrative remedies. Berry appealed.

The Nevada Court of Appeals explained that Congress enacted the Prison Litigation Reform Act of 1995 (PLRA) in an effort to curb a sharp rise in prisoner litigation that had occurred in the years preceding its passage. Among other things, the PLRA amended 42 U.S.C. § 1997e(a) to provide that no action shall be brought with respect to prison conditions under 42 U.S.C. § 1983 or any other Federal law, by a prisoner confined in any jail, prison, or other correctional facility until such administrative remedies as are available are exhausted.

In its order dismissing the complaint, the district court noted that § 1997e(a) limits inmates’ abilities to file civil rights actions relating to prison conditions by requiring them to first exhaust all available administrative remedies. Thus, because it found Berry failed to exhaust his administrative remedies, the district court concluded Berry’s complaint must be dismissed pursuant to the PLRA. On appeal, Berry argued, among other issues, that the district court erred in applying the PLRA’s exhaustion requirement to his state court civil rights action, even though his case was brought under § 1983.

The district court relied on § 1997e(a) in dismissing Berry’s underlying action based on its determination Berry had failed to exhaust his administrative remedies prior to filing his civil rights complaint. On appeal from this determination, Berry insinuated that § 1997e(a) did not apply to his complaint because it was brought in state, rather than federal court. The Nevada Court of Appeals explained that contrary to Berry’s argument, federal and state courts that have been confronted with this issue have widely recognized that the PLRA’s exhaustion requirement applies to § 1983 actions filed in state courts.

Accordingly, the Court concluded the PLRA’s exhaustion requirement set forth in § 1997e(a) applies to inmate § 1983 civil rights actions challenging prison conditions filed in Nevada state courts. Here, Berry did not dispute that his complaint, which alleged, among other things, that Feil and Brown tampered with his legal mail and that Feil retaliated against him for filing a grievance against her, challenged his conditions of confinement. Therefore, the Court found that under these circumstances, the district court did not err in applying § 1997e(a)’s exhaustion requirement to Berry’s claims.

Is child abuse and neglect a continuing offense for purposes of the statute of limitations?

Posted on by Jeff Jaeger

Rimer v. State (Nev. Supreme Ct. – June 11, 2015)

The issue is whether the Nevada Legislature intended for child abuse and neglect to be treated as a continuing offense and therefore the statute of limitations does not begin to run until the last act of abuse or neglect is completed.

Stanley and Colleen Rimer had eight children: Jason, Spencer, Enoch, Quaylyn, Aaron, Crystal, Brandon, and Stanley, III. Their youngest child, Jason, was born on March 11, 2004, and was found dead on June 9, 2008. At the time of Jason’s death, Spencer was 9, Enoch was 11, Quaylyn was 14, Aaron was 15, and Crystal was 17 years old, and Brandon and Stanley were adults.

Jason was born with congenital myotonic dystrophy, a chronic condition that affected his muscles and made it difficult for him to breathe, swallow, talk, and walk. Even at four years old, he walked like a baby, required diapers, and communicated mostly by fussing or screaming. He was treated by a neurologist, a gastroenterologist, a cardiologist, an orthopedist, a speech pathologist, a physical therapist, and a nutritionist. For a while, he was fed through a gastrostomy tube (G-tube) that was inserted through his abdomen so that food could be delivered directly to his stomach. He was happy and liked to play with other children.

During Jason’s lifetime, the Rimer home was frequently cluttered: the kitchen and bathrooms went days without being cleaned, the kitchen sink was often filled with dirty dishes, and the laundry room and bedrooms were normally piled with dirty clothing. There were also occasions where dog and bird excrement dirtied the carpet and remained there for days without being removed. Although the Rimers routinely hired housekeepers and carpet cleaners, the house and its carpets quickly became dirty again.

The clutter increased with the decline of Rimer’s construction business and the financial slump that followed. Rimer closed his office and vacated his storage units and moved their contents into the house. The presence of construction tools and paint buckets in the house created obvious safety hazards. Although the Rimer family tried to reduce some of the clutter and generate revenue through yard sales, the house was extremely cluttered at the time of Jason’s death: the household furniture had been moved or stacked for carpet cleaning, the kitchen sink was full of dirty dishes, and the fish tanks were green with algae.

The Rimer family continuously struggled with lice. The children were often sent home from school because they had head lice. Usually, they were treated with a lice-killing shampoo and sent back to school, where they were inspected by a nurse before being allowed back in the classroom. For a while, the children’s grandmother contributed to this recurring problem by refusing to be treated for lice. There also came a time when the lice-killing shampoo was no longer strong enough to kill the lice, but Rimer was able to find a product online that solved the problem.

The Rimer family did not go hungry. They had refrigerators downstairs in the kitchen and upstairs in the master bedroom. And there were also cases of food in the garage and pallets of food in the living room. They had frozen, refrigerated, canned, and dried food. The children routinely ate food that required little preparation or cooking, and when that sort of food ran out, they went upstairs and asked their parents for more. There was always food downstairs, but sometimes it was only the sort of food that required cooking and no one wanted to cook. Colleen did most of the cooking for the family. On one or two occasions, Quaylyn was punished by receiving only bread and water.

Rimer had a tiered approach to disciplining his children. First, he would place his children in a timeout by requiring them to stand in a corner for 5 to 30 minutes, then he would take away their videogame privileges, and finally he would spank them. But if a timeout was not severe enough for the level of misbehavior, the child might be sent to bed without dinner, and if the child’s misbehavior involved fighting, the initial punishment might be a spanking.

Rimer spanked his children on their behinds with boat paddles, paint sticks, belts, and his bare hands. The number of spanks in a spanking could range from 1 to 50. Rimer had two wooden boat paddles: one was three to four feet long and the other was two to three feet long. He purchased the second paddle to replace the first paddle and drew shark’s teeth on it with a permanent-ink marker. He broke both paddles while spanking his children and repaired them with duct tape. Rimer explained to his children what they did wrong and why they were getting spanked before he spanked them.

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Nevada Supreme Court examines forum non conveniens

Posted on by Jeff Jaeger

Gov’t of Marinduque v. Placer Dome, Inc. (Nev. Supreme Ct. – June 11, 2015)

The issue is whether the district court abused its discretion by dismissing a complaint for forum non conveniens when the events giving rise to the complaint occurred in the Republic of the Philippines and the alternative fora are in Canada.

The Provincial Government of Marinduque (the Province), is a political subdivision of the Republic of the Philippines. Placer Dome, Inc. (PDI), was incorporated under the laws of British Columbia, Canada. Beginning in the 1950s, a predecessor of PDI formed Marcopper Mining Corporation to undertake mining activities in the Province. This predecessor, and later PDI, held a substantial minority of the shares of Marcopper. According to the Province, PDI and its predecessor controlled all aspects of Marcopper’s operations. During the course of Marcopper’s operations, several incidents occurred that caused significant environmental degradation and health hazards to the people living in the Province, who are known as Marinduqueiios.

At the time the Province filed its complaint in the district court, PDI subsidiaries owned mining operations in Nevada. Shortly thereafter, PDI and another business entity amalgamated under the laws of Ontario, Canada, to form Barrick Gold Corporation. Barrick’s subsidiaries have continued substantial mining operations in Nevada. Barrick and PDI contended that only their subsidiaries conduct business in Nevada and personal jurisdiction was therefore lacking. The Province responded that the corporate veils may be pierced to establish personal jurisdiction in Nevada over both Barrick and PDI.

Barrick and PDI moved to dismiss for forum non conveniens, arguing that either British Columbia, where PDI was incorporated, or Ontario, where Barrick was formed, would provide a better forum for this litigation. After analyzing several public and private interest factors, the district court found that dismissal for forum non conveniens was warranted. The Province appealed.

The Nevada Supreme Court found that the district court did not abuse its discretion by finding that the public and private interest factors favored dismissal for forum non conveniens. Specifically, the district court did not abuse its discretion in its analysis of the public interest factors and the court did not abuse its discretion by finding that the private interest factors favored dismissal for forum non conveniens. Furthermore, the Court determined that finding that litigating in Nevada would not harass, oppress, or vex Barrick and PDI did not require the district court to deny the motion to dismiss for forum non conveniens. The Court also determined the district court properly exercised its discretion in imposing conditions on dismissal for forum non conveniens.

Therefore, the Court concluded that the district court properly gave less deference to the Province’s choice of a Nevada forum. Applying this less deference standard, the Court found the district court did not abuse its discretion by dismissing the Province’s complaint for forum non conveniens because, among other reasons, this case lacked any bona fide connection to this state, adequate alternative fora existed, and the burdens of litigating outweighed any convenience to the Province.

Must good cause exist to amend a pleading after the deadline to amend has passed?

Posted on by Jeff Jaeger

Nutton v. Sunset Station, Inc. (Nev. Ct. App. – June 11, 2015)

Rule 15(a) and Rule 16(b) of the Nevada Rules of Civil Procedure (NRCP) govern the procedures for seeking leave to amend pleadings in a civil action. Under NRCP 15(a), a party should be granted leave to amend a pleading when justice so requires and the proposed amendment is not futile. However, when a party seeks to amend a pleading after the deadline previously set for seeking such amendment has expired, NRCP 16(b) requires a showing of good cause for missing the deadline.

The issue is when a motion seeking leave to amend a pleading is filed after the expiration of the deadline for filing such motions, must the district court first determine whether good cause exists for missing the deadline under NRCP 16(b) before the court can consider the merits of the motion under the standards of NRCP 15(a).

Nutton slipped and fell while bowling with some friends at a bowling center operated by Sunset Station Hotel & Casino, shattering his right patella. At the time, Nutton was wearing his street shoes rather than bowling shoes rented from Sunset Station.

Nutton filed a complaint for personal injury against Sunset Station alleging that he slipped on a heavy concentration of lane wax or lane oil improperly applied to the approach area of the bowling lane so thickly his clothes were inundated after the fall. The complaint presented a single claim for negligence alleging that Sunset Station breached its duty of care by improperly placing excessive lane wax or oil in the approach area.

Over the ensuing months of discovery, Nutton repeated in interrogatory responses, as well as his own deposition, that he fell on excessive wax or oil so thick it permeated his clothes. He claimed the oil was thick and clear and based on his experiences, it was lane oil that he slipped on. During his deposition, Nutton was asked whether he had worn bowling shoes or street shoes when the fall occurred. He responded he had rented bowling shoes from Sunset Station on the day of the fall, but did not put them on because no employee of Sunset Station explained the need to do so. Nutton denied his street shoes played any role in the fall, testifying, “I don’t find that bowling shoes would have been a factor in my slipping and because I don’t see how that’s pertinent. . . . I feel as though I would have fallen in the same fashion whether I was wearing my own shoes or the shoes they provide.”

The parties located no other witness who saw or felt excessive wax or oil on the floor. To the contrary, Sunset Station produced an expert report concluding that a study of the bowling alley’s surveillance video revealed no evidence of a foreign substance on the floor and showed other people bowling in the same approach area just before Nutton with no difficulty. Moreover, Nutton retained his own expert witness who agreed Nutton did not slip and fall from oil residue on the approach. These opinions were contained in an expert report prepared before the expiration of the deadline to amend pleadings.

Subsequently, Nutton filed a motion with the district court seeking leave to amend his complaint pursuant to NRCP 15(a). Conceding that his own expert had agreed excessive lane oil did not cause his fall, Nutton sought to amend his theory of liability to instead plead that the fall was caused by his street shoes and Sunset Station had negligently failed to ensure he wore bowling shoes while he bowled. The proposed amended complaint asserted that Sunset Station’s own policies required bowlers to wear bowling shoes at all times while bowling, but employees and agents of Sunset Station breached their duty by failing to enforce the policy and permitting Nutton to bowl without them. Nutton also sought to assert that Sunset Station possessed superior knowledge regarding the risks of bowling in street shoes, yet failed to warn him of any danger.

Nutton’s motion was filed approximately three weeks after the expiration of the deadline to amend pleadings previously imposed by the district court. At the time, the final discovery cutoff date was just over two months away, and trial was set to begin three months after the close of discovery. Nutton’s motion to amend was also filed after the expiration of the statute of limitations period for asserting a negligence claim.

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Does an attorney’s computer malfunction excuse missing a court filing deadline?

Posted on by Jeff Jaeger

Fulbrook v. Allstate Ins. Co. (Nev. Supreme Ct. – June 4, 2015)

The Nevada Supreme Court affirmed the judgments of the district court in an order entered on January 30, 2015. Pursuant to NRAP 40(a)(1), the time for filing a petition for rehearing expired on February 17, 2015. No petition for rehearing was filed, and the remittitur issued on February 24, 2015, as provided in NRAP 41(a)(1).

On February 27, 2015, counsel filed a motion to recall the remittitur. Counsel stated that he did not become aware of the order of affirmance until February 26, 2015, “due to technical difficulties experienced by .. . counsel due to a virus on its servers as well as switching to a new case management system.” Specifically, counsel averred that he had been experiencing difficulties with case files as well as e-mails, and the e-mail notification “slipped through.” Further, counsel stated that his firm had switched to a new case management system, and “all of the client files were not properly loaded into the case management system by its technicians.”

Knowing that there were technical difficulties, counsel stated that his office checked the status of the case on the Nevada Supreme Court website on January 26, 2015, and no order had been issued. The site was not checked again until February 26, 2015, when counsel discovered that the order of affirmance had been entered. By that point, the time for filing a petition for rehearing had passed.

The issue is whether counsel’s technical difficulties are a basis on which the remittitur should be recalled.

The Nevada Supreme Court explained that The Nevada Electronic Filing and Conversion Rules (NEFCR) provide for electronic service of documents. The rule requires that “[w]hen a document is electronically filed, the court. . . must provide notice to all registered users on the case that a document has been filed and is available on the electronic service system document repository. This notice shall be considered as valid and effective service of the document on the registered users and shall have the same legal effect as service of a paper document.” Further, “[t]he notice must be sent by e-mail to the addresses furnished by the registered users under Rule 13(c).”

The required notice to which the rule refers is the notification within the electronic filing system. When a registered user logs in, he or she can see all the notifications in his or her cases. In addition to the official notice within the system, an e-mail is sent to all the e-mail addresses of the attorneys on the case who are registered users and to any additional e-mail addresses those attorneys may list in their profiles. The e-mail notifications are a courtesy, and the official notification of a document filed in this court is the notification within the electronic filing system.

In this case, the Court noted the electronic record reflected that an official notice of the order of affirmance was sent to counsel’s electronic filing account. Additionally, an e-mail was sent to two separate e-mail addresses at counsel’s law firm. Although counsel asserted that he did not receive either of the e-mails sent, he did not indicate that he was unable to access his electronic filing account to check his notifications during this time. Indeed, he successfully accessed the account to electronically file an opening brief and multiple volumes of appendices in an unrelated easel on February 3, 2015, a mere four days after the order of affirmance in this case was entered. The Court reasoned that if counsel had checked the notifications in his account at that time, he would have been aware of the dispositional order. The Court reminded counsel that it is his duty to log in to the electronic filing system and check notifications for his cases as often as is necessary to properly monitor his pending cases.

Counsel informed the Court that he checked the court’s website on January 26, 2015, and again on February 26, 2015. By referring to the court’s “website,” the Court noted that it was not clear whether he was referring to the electronic filing system or the public access portal of the court’s case management system. Either way, the Court determined that he would have learned of the disposition in time to file a petition for rehearing had he checked more frequently than every 30 days.

The Court reiterated the rule that a remittitur will be recalled when, but only when, inadvertence, mistake of fact, or an incomplete knowledge of the circumstances of the case on the part of the court or its officers, whether induced by fraud or otherwise, has resulted in an unjust decision. Here, the Court found the remittitur was regularly issued, and counsel had not demonstrated a basis on which the remittitur should be recalled. Therefore, the Court denied counsel’s motion.