When can a court terminate parental rights?

In re Parental Rights as to A.P.M. (Nev. Supreme Ct. – Sep. 10, 2015)

The issues are (1) whether the district court may terminate the parental rights of a parent who has completed a case plan for reunification and (2) whether the district court must wait the entire 20 months before applying both the presumption of token efforts in NRS 128.109(1)(a) and the presumption that termination of parental rights is in the best interest of the child in NRS 128.109(2).

Arli and his wife Abigail had three children together: J.M., A.P.M., and E.M.M. From July 2006 to November 2011, seven separate incidents occurred in which one of the three children swallowed foreign objects, such as coins, magnets, and batteries. All of these swallowing incidents happened while Arli was at work and Abigail was at home with the children. On the latest occasion, doctors had to surgically remove a large battery that was lodged in E.M.M.’s throat. Following E.M.M.’s surgery, the doctors grew concerned that Abigail was forcing her children to swallow foreign objects. The doctors explained that three-year-old E.M.M. swallowing the large battery was the equivalent of an adult swallowing a golf ball, making it highly unlikely that he swallowed it on his own. Due to their concerns, the doctors initiated a child protective services investigation.

In November 2011, the Clark County Department of Family Services (DFS) removed A.P.M. and E.M.M. from their parents’ home pursuant to NRS Chapter 432B. In July 2012, the juvenile court entered an order granting DFS legal custody of the children, and the children were placed in foster care. Arli and Abigail were issued case plans containing objectives for them to complete in order to regain custody of their children. Arli’s case plan required that he take parenting classes and participate in counseling. Almost immediately, Arli successfully completed the parenting classes and was participating in the required counseling. Despite these efforts, however, the juvenile court reviewed Arli’s and Abigail’s progress and determined that the children should remain in foster care.

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When does a sudden emergency excuse a driver’s negligence?

Frazier v. Drake (Nev. Ct. App. – Sep. 3, 2015)

This matter arises from a personal injury action following a motor vehicle accident in which a vehicle was rear-ended by a semitrailer. Evidence was presented at trial indicating that bees flew into the cabin of the semitrailer, and one bee landed on the eye of the driver. The issue is whether the district court properly instructed the jury on sudden emergencies.

Drake was an employee of MS Concrete Company, Inc. On the day of the incident, Drake was driving an MS Concrete semitrailer truck on a major road in North Las Vegas. As he was driving, bees flew into the truck’s cabin, and one bee purportedly landed on his eye. While Drake attempted to remove the bee from his eye, he failed to observe a stoplight and rear-ended Frazier and Keys, whose vehicle was stopped at the light. Frazier and Keys (collectively referred to as Frazier, except where the context requires otherwise) suffered injuries in the accident and subsequently initiated the underlying personal injury action against Drake and MS Concrete (collectively referred to as Drake).

During the trial, Drake presented his defense that the bee landing on his eye constituted a sudden emergency rendering him unable to avoid the accident. Based on this defense, Drake sought to have the jury instructed that, if it found that the bee landing on his eye constituted a sudden emergency, he only had a duty of care equal to that of a reasonable person faced with the same situation. Over Frazier’s objections, the court instructed the jury on sudden emergencies, and the jury ultimately found in favor of Drake. Frazier then moved for a new trial, arguing that the sudden emergency instructions should not have been given and that the jury ignored the court’s instruction regarding Drake’s standard of care in reaching its verdict. Drake opposed this motion, which the district court ultimately denied. Frazier appealed.

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When is a guilty plea the product of coercion?

State v. Smith (Nev. Supreme Ct. – Sep. 3, 2015)

Smith pleaded no contest to one count of child abuse resulting in substantial bodily harm. The State argued that the district court abused its discretion when it found that the actions of the Washoe County Department of Social Services (DSS) coerced Smith into pleading no contest. The issue is whether the district court abused its discretion in concluding that those actions amounted to coercion and that Smith’s no-contest plea was therefore involuntary.

Smith’s two-month-old daughter suffered a spiral fracture of her femur on November 30, 2010, purportedly while in Smith’s care. Smith always maintained his innocence of child abuse, but DSS concluded that Smith broke the leg in an act of child abuse and sought and obtained legal custody over the infant. Smith’s wife often had physical custody of their daughter, but at times DSS sought and/or obtained physical custody of the infant and placed her in foster care. As noted in the district court order partially granting Smith’s habeas petition, DSS indicated that it would consent to returning both physical and legal custody to Smith’s wife but that doing so was solely dependent upon Smith’s incarceration. After Smith was sentenced to prison in May 2012, DSS closed the case and returned legal and physical custody of the infant to Smith’s wife.

Smith filed a timely post-conviction petition for a writ of habeas corpus in which he argued that he should be allowed to withdraw his no-contest plea because it was coerced and thus not voluntary. Based on the facts above, the district court concluded that Smith was coerced into pleading no contest and issued an order partially granting the petition, directing the judgment of conviction and sentence be set aside, and concluding that he be allowed to withdraw his no-contest plea. The State appealed.

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Can a court consider the facts of a case to determine a person’s eligibility for a treatment program?

Cassinelli (Dominic) v. State (Nev. Ct. App. – Aug. 27, 2015)

Cassinelli pleaded guilty to coercion and preventing or dissuading a person from testifying. The guilty plea resulted from allegations made by Cassinelli’s long-time girlfriend that he had sexually abused her. Cassinelli requested the district court to defer sentencing and assign him to a treatment program for alcohol abuse under NRS Chapter 458 rather than impose a term of incarceration.

The issue is whether NRS 458.300(1)(d) precludes eligibility for a drug or alcohol treatment program for the crime of coercion, where the acts underlying the crime fall within the definition of domestic violence, but the defendant had not pleaded guilty to a charged felony which constitutes domestic violence as set forth in NRS 33.018.

Cassinelli and the victim were involved in a romantic relationship from 2006 to 2012. They had two children together. During that time, Cassinelli was employed as a police officer in Winnemucca, Nevada.

At the preliminary hearing, testimony established that the pair engaged in sadomasochistic sex acts. The victim testified that she consented in the beginning of the relationship, but over time, the violence escalated to the point where she no longer wished to participate in sadomasochistic sex acts. Eventually the victim took the couple’s children and moved away. After the victim discovered that Cassinelli began seeing another woman, the victim reported to the Winnemucca Chief of Police that Cassinelli had sexually assaulted her. Although the victim had accused him of domestic violence in the past, Cassinelli had no convictions on his record.

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Does loss of income include more than just salary for a self-employed workers’ compensation claim?

Mensah v. CorVel Corp. (Nev. Supreme Ct. – Aug. 6, 2015)

In this workers’ compensation case, a self-employed injured worker challenged an appeals officer’s order that denied him temporary total and partial disability benefits on the basis that he could not establish a loss of any income without evidence of a salary.

The issue is for self-employed individuals, does the lack of a salary associated with typical employment prevent an average monthly wage calculation for the purpose of determining lost income and rendering a workers’ compensation benefit decision.

Mensah was a self-employed delivery driver who contracted with FedEx Home Delivery for one of its delivery routes. Under his service contract, he was required to maintain workers’ compensation insurance, which he did through CorVel Corporation. While delivering packages, Mensah fell and injured his shoulder. Mensah’s workers’ compensation claim for his shoulder injury was accepted, and he received medical treatment. He was later released to light-duty work, but with his physical restrictions, he could not complete his delivery route and instead hired a replacement driver until he canceled the service contract. Mensah requested temporary disability benefits, which were denied on the basis that he continued to receive the same compensation under the FedEx service contract as he did before the injury occurred. Mensah administratively appealed, and the appeals officer denied both temporary total disability benefits (TTD) and temporary partial disability benefits (TPD) because Mensah did not produce any documentation showing that he had paid himself a salary of $1,425 per week as he claimed, and thus, any difference between his pre-injury and post-injury income could not be determined. The district court denied Mensah’s petition for judicial review. Mensah appealed.

The Nevada Supreme Court explained that generally, an employee who is injured by accident arising out of and in the course of employment is entitled to receive as TPD the difference between the wages earned after the injury and the benefits that the injured person would be entitled to receive if temporarily totally disabled, when the wages are less than the amount of those benefits. “Wages” means the amount of money that an employee receives for the time the employee worked. The statutes, however, do not specifically explain how a self-employed person’s wages are to be calculated.

The Court noted that Mensah suffered an industrial injury. This made him eligible to receive temporary disability benefits, calculated based on any loss in wages caused by the injury. The appeals officer concluded that Mensah was not entitled to those benefits because his salary could not be established from his personal and corporate income tax filings and he could not produce any paystubs or other evidence of a salary. But, Mensah was self-employed, and thus, the Court believed it was reasonable that he did not pay himself a salary in the typical sense.

The Court explained that the record clearly showed that Mensah received compensation from FedEx Home Delivery under his service contract, and he paid another employee to complete his delivery route during the time that he was medically restricted from doing so, demonstrating a loss to Mensah’s business income. And, although substantial evidence supported the appeals officer’s determination that Mensah had not established that he received a salary from his business, the appeals officer did not determine whether the documentation—including the Form 1099-MISC showing Mensah’s compensation from FedEx Home Delivery, the copies of paystubs showing wages paid to the replacement driver, and financial statements indicating Mensah’s business income and expenses—credibly established a loss to Mensah’s earnings, which may consist of more than just salary.

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Does filing a postjudgment motion move the deadline for filing a motion for attorney fees?

Barbara Ann Hollier Trust v. Shack (Nev. Supreme Ct. – Aug. 6, 2015)

The issue is whether the filing of a postjudgment motion that tolls the time to appeal also tolls NRCP 54(d)(2)(B)’s 20-day deadline to move for attorney fees.

Nicolle and her father, William (the Shacks), doing business as Kids Care Club, entered into a “Lease Option Agreement and Contract of Sale” (the lease) with Acadian Realty, Inc. Under the terms of the lease, the Shacks rented a commercial property in Las Vegas (the property) for three years. Upon execution of the lease, the Shacks owed $100,000 for a security deposit and $100,000 in option money. The nonrefundable $100,000 in option money acted as consideration for Acadian Realty not selling the property during the three-year lease and could be applied against the purchase price later if the Shacks chose to purchase the property.

Nicolle leased the property with the intent of opening and operating a child daycare facility, but the property needed extensive work prior to opening. During the reconstruction, the Shacks encountered numerous problems, which included asbestos, electrical wiring not being up to code, and the property not being connected to the Las Vegas valley water line. During this process, tensions between the parties rose and reached a breaking point when, according to the Shacks, Lawson, the owner of Acadian Realty, refused to sign documents required by the City of Las Vegas in order for construction to be completed.

The first trial

The Shacks filed a complaint against Acadian Realty, the Barbara Ann Haler Trust (the actual owner of the property), and Lawson, both individually and as the trustee of the trust (collectively referred to as Lawson). In June 2008, the parties proceeded to trial on the Shacks’ claims for breach of contract and breach of the implied covenant of good faith and fair dealing and Lawson’s counterclaims for breach of contract, intentional misrepresentation, and abuse of process.

Following the conclusion of the trial, but before the jury rendered a verdict, the district court dismissed Lawson’s abuse of process claim. The jury, however, already had the verdict form, which included a line for damages related to the abuse of process claim. Nevertheless, the trial judge stated that “if the jury comes back with an award on abuse of process, it will just be stricken.”

During a post-trial hearing regarding the fact that the jury wrongly awarded attorney fees and the abuse of process claim had been dismissed as a matter of law, the district court stated:

At any rate, here’s what I’m going to do. The case is a mess. I mean truly, the case is a mess. How it got that way the Lord only knows, but it’s been a series of one-step decisions at a time . . . . I’m going to order that Mrs. Lawson gets the $100,000 which was required as the second payment for the option money. She complied with her option agreement in that she never listed the property and it was never sold during the term of the lease, so I’m saying just exactly what Mr. Shack said. The money’s in an account; she can pick it up anytime she wants to. So I’m going to enforce what he told us in sworn testimony, so the $100,000 that’s been sitting in some title company or some escrow account somewhere in California gets paid to Mrs. Lawson.

Additionally, the district court affirmed the damages awarded to the Shacks and clarified that the $100,000 going to Lawson would be treated as an offset. Both parties appealed the final judgment along with other orders.

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How long does a recipient of an HOA’s notice of contract termination have to take legal action?

Double Diamond v. Second Jud. Dist. Ct. (Nev. Supreme Ct. – July 30, 2015)

NRS 116.3105(2) permits a homeowners’ association that provides at least 90 days’ notice to terminate any contract that is not in good faith or was unconscionable to the units’ owners at the time entered into. The issue is whether the 90 days’ notice operates as a statute of limitations or a notice for the recipient to commence litigation.

In 1996, Rowe, the developer of Double Diamond Ranch Master Association (the Association) entered into a Maintenance and Operation Agreement (Maintenance Agreement) with the City of Reno. Because the property was in a flood zone, the Federal Emergency Management Agency required the developer to obtain a Letter of Map Revision and enter into the Maintenance Agreement prior to developing the South Meadows and Double Diamond Ranch homes in Reno, Nevada. The Maintenance Agreement required, among other obligations, that the Association maintain certain flood control channels, provide rock rip-rap protection in the Double Diamond/South Meadows area, and file an annual report.

In February 2012, the Association gave notice to the City that it was terminating the contract pursuant to NRS 116.3105(2). This statute permits homeowners’ associations to terminate at any time a contract that was entered into by a declarant if the contract was (1) unconscionable to the units’ owners at the time entered into, and (2) the association provides 90 days’ notice to the recipient. In its notice, the Association claimed that it should not have been a party to the Maintenance Agreement because Mr. Rowe signed the agreement on the Association’s behalf one day before the Association legally came into being. Further, the Association claimed that Mr. Rowe entered into the Maintenance Agreement for his own benefit, in order to develop the adjacent property as he desired. Finally, the Association claimed that the City never sought to enforce the Maintenance Agreement and only learned about its existence recently. Later that month, the City rejected the Association’s notice of termination.

In October 2013, the City brought an action against the Association seeking specific performance of the Maintenance Agreement. The Association moved to dismiss the complaint for failure to state a claim for relief and failure to join indispensable parties. More specifically, the Association argued that the contract was invalid as the Association had statutorily terminated the Maintenance Agreement 20 months before. The Association also contended that it did not own the property at issue, and other indispensable parties were necessary, such as the land owner and Mr. Rowe, the developer.

At the hearing on the motion, the Association argued that the statute required the recipient of the notice of contract termination to file suit within 90 days. More specifically, the Association argued that the burden shifted to the recipient to bring a cause of action within that time if it questioned an association’s claim of unconscionability or lack of good faith. The district court ultimately denied the Association’s motion to dismiss. The court determined that there were several genuine issues of material fact; for example, whether the Association, including the property owners, benefited from the Maintenance Agreement and whether the parties’ agreement was unconscionable. Further, the court stated that the statute provided no guidance as to when a recipient must pursue legal action, and instead, the City’s letter rejecting the Association’s notice of termination provided enough notice to the Association that a justiciable controversy may exist as a result. Thereafter, the Association petitioned the Nevada Supreme Court for a writ of mandamus or prohibition directing the district court to vacate its order denying the Association’s motion to dismiss and to order dismissal instead.

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Can the State appeal an order granting a prejudgment motion for a new criminal trial?

State v. Harris (Nev. Supreme Ct. – July 30, 2015)

The issue is whether the Nevada Supreme Court has jurisdiction to review the State’s appeal from an order granting a prejudgment motion for a new trial in a criminal matter.

On October 2, 2013, a jury returned verdicts finding Harris guilty of first-degree murder, child abuse and neglect with the use of a deadly weapon, and two counts of child abuse and neglect. Prior to sentencing, Harris filed a timely motion for a new trial, which the district court granted. Pursuant to NRS 177.015(1)(b), the State appealed from the order granting the motion for a new trial. In State v. Lewis, 124 Nev. 132, 178 P.3d 146 (2008), the Nevada Supreme Court previously held that NRS 177.015(1)(b) only permits appeals from district court orders resolving post-conviction motions for a new trial. Therefore, the Nevada Supreme Court in this case ordered the State to show cause why the appeal should not be dismissed for lack of jurisdiction.

The State argued that the Lewis holding was based on a rationale that has no application to its right to appeal in a criminal case. The State, therefore, requested the Court to revisit Lewis as it related to appeals from orders granting prejudgment motions for a new trial.

The plain language of NRS 17.015

NRS 177.015(1)(b) provides, in relevant part, that any aggrieved party, whether it is the State or the defendant, may appeal “from an order of the district court. . . granting or refusing a new trial.” Thus, the Court determined that the plain language of NRS 177.015(1)(b) clearly authorized an appeal from an order granting a motion for a new trial and did not limit the right to an appeal based on when the motion was filed or when the order resolving it was entered.

State v. Lewis and NRS 177.015(1)(b)

The Court explained that the Nevada Supreme Court has had a prior opportunity to consider the State’s right to appeal pursuant to NRS 177.015(1)(b) from a prejudgment order granting relief. The Lewis court held that the State did not have a statutory right to appeal from an order granting a presentence motion to withdraw a guilty plea. In reaching this decision, the Lewis court observed that Nevada Rule of Appellate Procedure NRAP 3A, which governs civil appeals, used language similar to the provision in NRS 177.015(1)(b) regarding an appeal from an order granting or refusing a new trial and that the language in NRAP 3A had been interpreted to only allow for an appeal from an order denying a post-judgment motion for a new trial. Noting these similarities and that the Nevada Supreme Court had treated a motion to withdraw a guilty plea as tantamount to a motion for a new trial, the Lewis court stated that it saw no reason to construe the same language in NRS 177.015(1)(b) in an inconsistent manner.

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What is the effect on a foreclosure when a promissory note and deed of trust are split?

In re Montierth (Nev. Supreme Ct. – July 30, 2015)

The United States Bankruptcy Court for the District of Nevada certified two questions of law to the Nevada Supreme Court concerning the legal effect on a foreclosure when the promissory note and the deed of trust are split at the time of foreclosure. The bankruptcy court asked what occurs when the promissory note and the deed of trust remain split at the time of the foreclosure and whether recordation of an assignment of a deed of trust is a purely ministerial act that would not violate the automatic stay.

In June 2005, the Montierths signed a promissory note in favor of 1st National Lending Services for $170,400. The note provided that the lender may transfer the note. The note was subsequently transferred to Deutsche Bank.

The note was secured by a deed of trust on the Montierths’ property in Logandale, Nevada. The beneficiary of the deed of trust was Mortgage Electronic Registration Systems, Inc. (MERS), solely as nominee for lender and lender’s successors and assigns. Additionally, the deed of trust provided:

MERS holds only legal title to the interests granted by Borrower in this Security Instrument; but, if necessary. . . , MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

The Montierths’ last payment on the note was made in June 2009. Deutsche Bank recorded a notice of default and initiated foreclosure. The Montierths opted into Nevada’s Foreclosure Mediation Program (FMP), but the first two mediation attempts were unsuccessful. The Montierths petitioned for judicial review of the attempted mediation, and the district court found that Deutsche Bank failed to participate in the mediation in good faith.

Deutsche Bank then filed another notice of default, and the Montierths again elected to mediate. Less than two weeks before the scheduled mediation, the Montierths filed for bankruptcy. At the time the Montierths filed for bankruptcy, the note and the deed of trust were separate—Deutsche Bank held the note and MERS was the beneficiary of the deed of trust.

After the Montierths filed for bankruptcy, MERS assigned its interest in the deed of trust to Deutsche Bank on November 25, 2011, but the assignment was not recorded until December 23, 2011. Prior to the recordation of the assignment, Deutsche Bank filed a proof of claim in the Montierths’ bankruptcy, claiming that it was a secured creditor.

On September 5, 2012, Deutsche Bank filed a motion for relief from the automatic bankruptcy stay so that it could foreclose on the Montierths’ property. The Montierths objected to Deutsche Bank’s standing to bring the motion. The Montierths also objected to Deutsche Bank’s proof of claim insofar as it alleged secured creditor status. Both objections were premised on the argument that Deutsche Bank was not a secured creditor because it did not have a unified note and deed of trust when the bankruptcy petition was filed and the automatic stay precluded the reunification of the instruments.

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Can an insurer circumvent Nevada’s absolute-liability statute?

Torres v. Nev. Direct Ins. Co. (Nev. Supreme Ct. – July 30, 2015)

The issue is whether an injured party may assert NRS 485.3091, Nevada’s absolute-liability statute, in order to sue a tortfeasor’s insurer after obtaining a judgment against the tortfeasor, and whether an injured party can pursue a bad faith claim against the insurer.

In April 2006, Perez-Castellano was driving a vehicle owned by Mollinedo-Cruz and insured by Nevada Direct Insurance Company (NDIC) when he crashed into Torres’ car, injuring Torres. Neither Mollinedo-Cruz nor Perez-Castellano contacted NDIC. Torres filed a complaint against Mollinedo-Cruz and Perez-Castellano for negligence, negligent entrustment, and punitive damages stemming from the car accident. Mollinedo-Cruz and Perez-Castellano answered the complaint, denying all of the allegations and raising several affirmative defenses. Mollinedo-Cruz and Perez-Castellano then stopped participating in the action.

NDIC subsequently filed a complaint for declaratory relief against Mollinedo-Cruz, Perez-Castellano, and Torres. NDIC argued that because Mollinedo-Cruz violated the policy in failing to cooperate with the post-accident investigation, NDIC was not responsible for his defense or indemnification in Torres’s suit against Mollinedo-Cruz. NDIC made an offer of judgment for $1 more than Mollinedo-Cruz’s policy limit to Torres, but she declined the offer. The district court entered default judgments against Mollinedo-Cruz and Perez-Castellano in the declaratory relief case and concluded that NDIC was not obligated to defend or indemnify either of them for the accident with Torres. But, the district court concluded that the default judgments did not apply to and are not binding on Torres and she could pursue any and all claims/defenses available to her under Mollinedo-Cruz’s insurance policy. Torres subsequently acquired a default judgment against Mollinedo-Cruz and Perez-Castellano in her original liability action.

Torres then filed a new complaint against NDIC. Torres claimed that NDIC breached the insurance policy when it failed to pay her claim, she was entitled to damages based on a theory of promissory estoppel, and NDIC breached the implied covenant of good faith and fair dealing. NDIC filed a motion to dismiss Torres’ promissory estoppel and breach of the implied covenant of good faith and fair dealing claims for failure to state a claim. The district court denied NDIC’s motion on Torres’ promissory estoppel claim, but granted the motion on Torres’ claim that NDIC breached the implied covenant of good faith and fair dealing.

At the conclusion of a two-day bench trial, the district court entered judgment in favor of NDIC. The district court concluded that Torres was neither a named contracting party nor an intended third-party beneficiary of the insurance contract. The court further concluded that Torres was not a judgment creditor of NDIC because NDIC obtained its default judgment that it had no duty to defend or indemnify anyone for the accident with Torres before Torres obtained her default judgment against Mollinedo-Cruz and Perez-Castellano. The court also concluded that NDIC fulfilled any obligations under the insurance contract because NDIC made an offer of judgment for the policy limit to Torres, which she rejected.

In regard to Torres’ promissory estoppel argument, the district court determined that letters sent from NDIC to Torres indicating that it was reviewing her medical records and it would review the demand and contact Torres’ counsel with an offer did not amount to a promise to pay any amount, and that none of the correspondence between NDIC and Torres precluded Torres from taking action. Torres appealed.

Torres argued that the district court erred when it failed to apply NRS 485.3091 to her action. Torres also argued that the district court erred when it considered the statutory offer of judgment made in the separate declaratory relief action and concluded it satisfied NDIC’s obligations under NRS 485.3091.

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